EU is ready to buy large volume of Ukrainian corn

2024-05-13 07:46:12 Business

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According to the USDA estimates, in 2016/17 MY world corn importers decreased purchases by 2% against the previous season - to 137.1 MMT, despite the record world corn production.
Still, evaluating the results of 2016/17, corn exports from Ukraine were up 26% year-on-year, at record level of 21.2 MMT. Having gathered second largest corn harvest, Ukraine managed to deliver more corn to all the key destinations, except for the China, which tries to get rid of high corn stocks. What is more, in 2016/17 Ukraine moved up to the third place on the list of top world corn exporters, leaving behind Brazil.

Considering the USDA`s forecast of increase in world corn imports in 2017/18 (+6% to 145.8 MMT) the situation seems favorable for another good export season in Ukraine. Among the key Ukrainian corn buyers only Israel has plans to decrease corn imports and compensate demand of feed sector with higher DDGs and oilseed meal imports.

Corn import estimates for top Ukrainian corn buyers, MMT(USDA, October est.)
2016/2017 2017/2018*F
EU 14.8 16 ( )
Egypt 9 10 ( )
Iran 8.5 10 ( )
China 3 3 ( - )
Israel 1.7 1.4 ( )
Tunisia 1.07 1.3 ( )

Concerning the key export market of Ukrainian corn ? EU, in 2017/18 the USDA forecasts the corn harvest to go down by 2.8% from last year to 59.39 MMT.
Imports are forecast to be second largest - at 16 MMT and almost in line with record of 2013/14 (16.014 MMT). It should be noted that season 2013/14 was marked with second largest exports of Ukrainian corn - thanks to the high import necessity of EU.
Considering the growing share of Ukrainian corn in EU imports (in 2016/17 ? 68% in the total EU corn imports against 63.8% in the previous season), Ukraine can count on increase in corn exports to EU in 2017/18 MY as well.
Thus, EU importers should hurry up to buy Ukrainian new crop as soon as possible, as in 2017/18 we do not expect a new record corn exports from Ukraine due to lower crop forecast. According to our estimates, Ukraine may deliver about 9-9.3 MMT of corn to EU, but the forecast may depend on the results of the ongoing harvesting campaign.
In its turn, Ukrainian traders should not exclude serious competition from Brazil, which started corn export season in July 2017.

Olena Gesova
Grain and oilseed market analyst
UkrAgroConsult