Ukraine corn prices plummet as Turkish buyers retreat

Ukrainian corn prices dropped by over $12/mt in just two weeks, with a decline in demand from the Turkish market, data from Platts, part of S&P Global Energy, showed.

On May 13, Platts assessed the price of Ukrainian corn FOB POC at $240.50/mt, down from $253.25/mt on May 1, marking a $12.75/mt decrease in just two weeks.

The Ukrainian market had previously reached a two-year high within three weeks, driven by increased demand from Turkey following the introduction of tariff-rate quotas for corn imports on March 19. Speculation surrounding an additional quota with a zero percent tax further fueled demand for Ukrainian corn.

However, the Turkish government has since introduced another quota to stabilize domestic prices. In conjunction with this, the Turkish State Agency released corn reserves to mitigate the market's reliance on imports, leading to a subsequent decline in demand for Ukrainian corn.

A trader from Ukraine said, "Turkish buyers are now passive regarding Ukrainian corn."

Buying interest, which peaked at $253/mt for CIF Marmara on April 16, rose to $264/mt on May 1 for one-month forward delivery. However, bids fell again to $254/mt on May 9 for the same delivery timeframe. Meanwhile, offers at $268/mt for CIF Marmara on May 1 dropped to $254/mt on May 14 for one-month forward delivery.

In early May, Ukrainian corn was the most expensive globally, with Turkey being the only destination willing to pay a premium due to non-GMO compliance in the country. As demand from Turkey waned, sellers reduced their offers to remain competitive in the global market and make Ukrainian corn more affordable for other destinations.

An importer from Greece said, "Ukraine has already reached the highest price, and I see prices beginning to fall."

Data from traders indicated that in April, out of 1.1 million mt of corn loaded from the Pivdennyi-Odesa-Chornomorsk ports in Ukraine, 497,367 mt were destined for Turkey, accounting for over 40% of total corn exports from these ports. As of May 13, out of 666,514 mt of corn nominated from POC ports, 432,314 mt are bound for Turkey. In contrast, during the same period in April 786,537 mt were nominated from the ports.

In response to the drop in demand, Ukrainian farmers have reduced CPT prices, which has allowed traders to lower their offers. A seller from Ukraine said, "Farmers are in shock right now due to the changing price trend."

Market participants anticipate that prices will remain lower for the leftover stocks of the old crop from Ukraine. The seller added, "Brazil will soon enter the market, covering Egypt and Spain—our main destinations. The US and China are on a positive trajectory, so China also covered, and demand is muted for Ukrainian corn."