As a result of the meeting held by the Economy Ministry with grain market participants it was decided to enter into the Memorandum a corn volume that can be exported with no threat to the domestic market, at 24 MMT until June 30, 2021 (the Economy Ministry’s balance is calculated from July to June). As a reminder, the Memorandum between market participants and the relevant ministry has been signed annually since 2011 in order to make the market more transparent and predictable.
Noteworthy is that the above volume is quite sufficient for realizing Ukraine’s export potential. According to the supply and demand balance of UkrAgroConsult, its export potential equals right 24 MMT, including 8.8 MMT exported in September-December (just some 37%).
1.65 MMT was exported between January 1-22, with another some 1 MMT scheduled for shipment from ports. We estimate January corn exports at 2-2.5 MMT, i.e. 45-47% of export potential will be realized in September-January.
It should also be kept in mind that a certain amount of corn has already been contracted (1-1.5 MMT according to our estimate), therefore 11-11.5 MMT remains available, i.e. Ukraine’s corn export potential has been a bit more than half realized (50-53%).
In November-December 2020/21, Ukrainian corn was actively exported owing to forward contracts signed with China back in the summer. By contrast, similar volumes of November and December exports were seen in MY 2018/19, though that season’s crop was much larger at 35 MMT.
Steady high demand from China and a possible recovery in demand from the EU may push up shipments in February-March to an above-average level. However, late in the season we’ll see a sharp slowdown in exports because of depleting stocks.