2023/2024 will be another year of trials. Average farmers have already recovered from the shock of the war and bet on the always liquid sunflower. Still, strangely enough, a lot of corn was sown too. Although they could have bet on oats or millet, which are usually purchased at early stages.
The priority for farmers remained corn and wheat, which last year they exported as much as they could and at any price (just to sell). So, last spring-summer, when the price of food wheat in the world on physical markets was 330 USD/t FOB, Ukrainian producers had only 150 USD/t. The difference between 330 and 150 was taken up by logistics and expensive transshipment.
If it weren’t for the war and the forced “corridors,” at the beginning of the export season, a Ukrainian farmer would have received 260-270 dollars/ton for a ton of high-quality food wheat (on an EXW-elevator basis).
A huge export machine including the “grain corridor” through ports, “roads of solidarity” through European countries – all this works due to the losses of the local farmer.
In 2023/2024 marketing year, Ukrainian farmers are expecting a better price. But there are currently no special prerequisites for this.
The only thing that can be counted on for sure is a relatively brisk demand for food grains against the backdrop of an expected fall in the total stock.
In addition, the potentially low quality of grain can heat up the situation, because the manufacturers have reduced the technological package to a minimum. Therefore, we should traditionally expect fierce competition (for high-quality grain) between exporters and flour mills with bakers.
As of the end of June, against the backdrop of drought in Europe, export prices for large consignments of food wheat (12.5% protein) on terms FOB Port of Constanta (Romania) are USD 261-265/t (USD 234-240/t, DAP Constanta) for delivery in July.
Ukrainian farmers look to the sky with hope and ask for Victory, good weather, maximum yield – and, finally, a decent price for what has been grown.