With its Decree № 418 (from Apr 23, 2008) Cabinet has clarified grains market situation: as to Decree, wheat export quota has grown from 200,000 MT up to 1,200.000 MT (barley – from 400,000 MT up to 900,000 MT), while quoting regime has been prolonged until Jul 01, 2008. Now, market operators can pursue a more definite trade policy until this MY end.
Food wheat market trade wasn’t much active within this week as main traders had already accumulated grains reserves enough to make shipments within export quota limits, while companies which had recently entered market were quite reluctant to buy grains due to global market prices lowering tendency (resulting in export profitability decline). Complaints of big trade companies on Government-imposed export limitations are quite justified: due to Ukrainian/global markets Dec/07-Feb/08 significant gap (reaching US$100–150 per MT), companies could have assured 30–40% grains export shipments profitability. Now, however, companies must sell grains down against purchase/storage price, — that is, at loss.
Within this week feed wheat offers number was slightly up against previous week due to MY ending/feed wheat high cost.
No significant changes were registered on feed barley market within this week. As of recent, barley succeeded to retain leading prices on Ukrainian domestic grains market due to global market high demand/limited offer. In meanwhile, however, approaching of this year barley harvesting continues to push down barley prices: experts say prices are likely to decline to UAH1,100–1,120 per MT.
There was no big feed maize trade within this week. «Free maize» reserves, stored on
country elevators/warehouses, were very low. Besides, agrarians had already started getting ready to new MS and therefore tried to empty storage areas until this year Jun. It is to be admitted, exporters weren’t quite glad with this week maize offer prices: grain holders offered maize at UAH1,300–1,330 per MT (while purchasers were ready to pay only UAH1,250–1,290 per MT). Besides, maize market was directly influenced by currency instability: companies which had concluded export contracts earlier (for instance, at US$275 per MT), have already lost about US$8–10 per MT due to recent UAH strengthening resulting in maize cost price growth.
EXPORT
Barley
Within this week feed barley purchase prices ranged within UAH1,210–1,280 per MT (EXW-ex-elevator, depending on regions/contract conditions). US$ purchase prices fluctuated within US$285–295 per MT (FOB).
Wheat
Feed wheat prices were UAH1,190–1,260 per MT (EXW-ex-elevator).
Feed wheat ports US$ purchase prices ranged within US$290–300 per MT (CPT port).
If wheat export were free, feed wheat offer prices would possibly be US$300–310 per MT (FOB).
4 class food wheat US$ prices (taking into account global market prices current conjuncture) equaled to US$320–330 per MT (CPT port).
Maize
Traders purchased feed maize at UAH1,200–1,280 per MT (EXW-ex-elevator).
Processors Activity
Most processors started working only since this week beginning and therefore had enough grains reserves within entire week to satisfy production needs (which were rather low due to slack demand).
Grain holders retained rather high sale prices; holders were quite reluctant to sell grains at low prices. It is to be admitted, country grains market has been since long dominated with «bear» tendencies, which now strengthen as much as new grains crop harvesting approaches.
Some processors functioning was negatively affected by country feed maize competition toughening (emerged due Government having had cancelled maize export quoting Mar 28, 2008), — due to this week feed maize cost remained still slightly down against other grains
(while maize energetic value is somewhat up against other grains).
Processed Products
Within this week flour market conjuncture changed depending on regions, companies functioning specific, other market operators activity, etc.. In most regions flour milling industry products sale rates were up against previous week. Flour millers admit that part of clients resumed highest grade flour purchases (due to many integrated plants having had stopped functioning within Easter/May holidays resulting in highest grade flour small deficit). However, many consumers were reluctant to renew flour purchases as they looked forward to flour products prices decline (expected to emerge due to country grains market prices lowering trend).
Within this week part of flour millers continued successfully selling their ready products on foreign markets. Ukrainian flour enjoyed high demand in Georgia, Azerbaijan, Armenia, Moldova and Middle East countries.
Within this week consumers demand for mixed feeds plants ready products remained stable. However, as of now, demand has already started gradually lowering as much as Jun approaches. Among other mixed feeds consumers, poultry producers have shortened purchases especially much (as poultry meat output reaches its peaks traditionally within Apr/May and Oct/Dec).
