As of mid-January, Ukrainian corn at the highest price level since MY 2012/13. Abnormal price rises were lately seen in MY 2013/14 and MY 2017/18. However, those seasons featured bad harvests, whereas the current season, on the contrary, witnesses a record increase in global production – up 1.6% on the year and up 0.5% from the second highest (MY 2016/17).
The key reasons why prices of Ukrainian origin behave this way include the following:
- strong foreign demand (primarily from China),
- the reluctance of Ukrainian farmers to sell the commodity,
- understated expectations of market participants about the final crop size.
Ukrainian prices follow trends in the world market, where the price rally was driven by a feeling of tight supply of South American corn after all-time record shipments in the previous season.
According to UkrAgroConsult, Ukraine’s corn export potential in September-January is realized at 40-45%.