Ukraine’s 2021-22 wheat exports up 29% on year, prices stabilize

The momentum of wheat exports from Ukraine slowed down over the week to Jan. 24 but overall shipments remained nearly 29% higher on the year, agriculture ministry data showed Jan. 25.

Wheat prices had been softening for the past few weeks due to the ongoing tensions between Ukraine and Russia. However, export quotes stabilized over the past few days on hopes of firm exports in the near-term.

S&P Global Platts assessed FOB prices of 11.5% protein wheat from Ukraine at $320/mt on Jan. 24, steady since Jan. 20.

Ukraine’s wheat exports since the start of marketing year 2021-22 (July-June) through Jan. 24 were at 16.6 million mt, up from 12.9 million mt in the corresponding period during the previous year. Ukraine had shipped 16.64 million mt of wheat in MY 2020-21.

With Ukraine running a promising export campaign in MY 2021-22, a supply tightness may also boost prices in the near term.

S&P Global Platts Analytics projected Ukraine to export 22.5 million mt of wheat in MY 2021-22, while the US Department of Agriculture forecast the country’s wheat exports at 24.2 million mt in its World Agricultural Supply and Demand Estimates report Jan. 9.

However, with an increase in domestic prices amid rising external demand, Ukraine is mulling a 4 million mt limit on wheat exports till June to cool off prices.

The government had also signed a pact with traders in October 2021 to limit wheat exports to 25.3 million mt in MY 2021-22.

Ukraine harvested around 33 million mt of wheat in MY 2021-22, up from 25.4 million mt in MY 2020-21, according to the ministry.

Platts Analytics has projected Ukraine’s wheat production at 31.2 million mt for MY 2021-22. The USDA has pegged Ukraine’s wheat output for the year at 33 million mt.

Farmers in Ukraine planted winter wheat across 6.2 million hectares for MY 2022-23 as of Dec. 30, 2021 accounting for nearly 94% of the forecast area of 6.7 million hectares, according to agriculture ministry data.

Russia-Ukraine tensions impact

Despite the increase in exports, Ukraine’s wheat export prices have shed nearly 3% on the month amid escalating tensions at the Ukraine-Russia border.

The two countries are major players of the global grains market and their combined wheat exports account for 23% of global total of 206.9 million mt, according to forecasts from the US Department of Agriculture for the 2021-22 marketing year.

Despite the tensions, traders expect the demand for Ukraine’s wheat to remain upbeat in the near term as Russia has restructured its export tax mechanisms and imposed an export quota from Feb. 15.

“Demand for Ukrainian wheat is likely to increase from middle-eastern countries as the shipments from Russia may be limited further. However, there are some uncertainties due to tensions that may impact the prices,” a Kyiv-based trader said.

The ongoing tensions may however, weigh on prices of wheat in the Black Sea region, particularly Ukrainian wheat, some traders believe.

S&P Global Platts

Tags: Ukraine, Russia, export, prices, wheat