Indonesian demand for Ukrainian grain is growing

Export sales of Ukrainian wheat are growing steadily. Since the beginning of February, more than 2 million tons have been contracted, which could be a record supply for the season. As of March, 1.4 million tons of wheat have already been sold. This was discussed on February 20 during the weekly briefing organized by the analytical center of the agricultural cooperative PUSK, created within the framework of the VAR.

“Traders say that Indonesia is very actively involved in purchases of Ukrainian feed wheat. This Asian country has sky-high prices on the domestic market and is interested in importing grain. The demand price from Indonesia is $260-265/t CIF. It is very profitable to export Ukrainian wheat to Indonesia. The fly in the ointment for these plans is the conflict in the Red Sea, where there is a high risk of shelling of the merchant fleet. This is still a systemic problem that negatively affects trade in the Black and Mediterranean Seas. The risk is holding back Ukrainian traders from fixing their positions in this direction. The market expects that in the second half of March, the passage of ships through the Red Sea may stop completely. A logistical solution would be to bypass the ships by sea through Africa, but this will raise the cost of freight by $10-12 per ton,” the PUSK said.

Ukrainian wheat remains the cheapest on most markets.

“Last week, Ukraine sold wheat with a protein content of 12.5% to Egypt at $224 per tonne for delivery to Egypt. For comparison, Russian wheat cost $245 on an FOB basis. Ukrainian wheat is very cheap compared to other grains in the EU, Egypt and Turkey. The trade tries to keep prices low so that it makes sense to trade on many bases. Price gaps are large, which keeps the CPT market at low levels. Nevertheless, there are more and more sellers of wheat on FOB basis, many farmers are willing to sell for $195 per ton at the Danube ports. At the same time, on CPT terms, wheat costs $175-188 per ton, and by the end of the week, the price tags may lose another $2 per ton,” adds the analytical department of PUSK.

Tags: grain, Indonesia, wheat, Ukraine