Ukrainian corn falls below $200/mt to two-year low as logistics costs rise

Ukrainian corn prices have fallen to their lowest level in two years, as logistics constraints and high transport costs weigh on export flows, market sources said.

Platts, part of S&P Global Energy, assessed Ukrainian corn at $199/metric ton FOB POC on Nov. 2, down $24/mt from $223/mt on Oct. 2. The assessment last fell below $200/mt on Sept. 3, 2024.

Traders attributed the drop below $200/mt to the high cost of moving cargoes out of the country. Logistics costs to export Ukrainian corn via Constanta are "closer to $100/mt," according to a seller, forcing farmers to lower their prices to secure sales.

"Ukrainian farmers may sell at low prices, as logistics to CVB from Ukraine is expensive too," a Kyiv-based seller said.

Corn flows from Ukraine's POC ports remain heavily restricted due to the risks linked to the escalation in the Black Sea that began in July.

However, traders said a vessel was recently traded out of POC to Turkey in October. "Heard rumors that they allegedly sold a handy vessel of corn to Marmara basis execution from POC," the Kyiv-based seller said. Several other market participants also reported the deal, but confirmation with the seller involved could not be obtained.

A second Ukrainian seller said they "hear there might be some vessels calling POC."

High freight costs, however, remain a deterrent. "We had one vessel asking $120+ for voyage from POC to eastmed port; we offered nothing as risks are too high in our view," said a corn seller who had a vessel calling at POC.

Danube ports, particularly Izmail, remain the main outlet for Ukrainian corn exports, with several coaster cargoes reported to have been traded out of Izmail on a FOB and CIF basis for spot and one-month-forward shipments.

The latest indications for spot-shipment coaster cargoes were heard at $170/mt bid and $175/mt offered FOB Izmail.

Ukrainian corn is also leaving the country via trucks and railways through the western borders.

Meanwhile, some major Ukrainian agroholdings and exporters are shifting their focus to higher-value crops amid weak domestic corn prices.

"Corn now is not at the table. We have limitations on export routes. We use this capacity to maximize our cash and ship high-value crops," a Ukrainian corn producer said.

"Wheat and corn shipping is loss-making now. We are holding wheat and corn at elevators till something changes," the producer added.