Price Is Everything. Jonathan Grange on Ukraine's Chances of Winning Back Asian and African Markets, russian Dumping, and Farmers' Mindset on Both Sides of the Ocean
Photo by: Grain Ukraine Conference
Ukraine has lost its market share, but it can be regained with the right price. russia is dumping, but Europe is squeezing it out of the market. China focuses only on what is profitable, even if it is genetically modified. Ukrainian farmers are not rushing to sell, new traders are haggling over 50 cents—and fall out of the game. Backstage at the international conference Grain Ukraine, Sunstone Brokers co-founder Jonathan Grange discusses the realities of commodity trading, where margins are becoming negligible and the stakes are high.
Latifundist.com: At the beginning of the full-scale war, we analysed scenarios in which Ukraine would retain its role as a global grain producer. One of them predicted that the war would drag on and we would have to win back markets. And as we can see now, this scenario has become a reality. At the time, you commented that it would be easy to win back markets by offering a better price. Do you still hold this view?
Jonathan Grange: The biggest mistake in agricultural commodities trading is focusing on market share. In reality, everything is determined by price. As Peter noted during the panel: it’s all about price. Sure, we can talk about quality. For example, Ukrainian yellow peas get a $5 premium compared to other countries. But when the price is $300 or $500, those $5 are trivial. In the end, the market always decides everything based on price.
Latifundist.com: From external to internal prices. Just last year, there were moments when domestic prices in Ukraine were higher than in Europe. Is this an exception or a new trend?
Jonathan Grange: When the war started, we saw massive exports—at any price. Farmers were simply trying to convert their harvest into money to protect themselves. It was a survival instinct.
But over time, as the war dragged on, farmers realized that in most cases, their infrastructure wasn’t being targeted. Yes, there were exceptions—like the targeted strike on Oleksiy Vadaturskyi or the hit on Kernel’s facilities—but overall, elevators, warehouses, equipment weren’t systematically attacked.
That changed behavior. Farmers began to feel more confident about storing their products. The sense of urgency—"I’ve harvested, now I must sell immediately before a missile hits"—disappeared. Instead, they started thinking, "I don’t think I’m at risk; I can hold on."
This creates a particular market situation we also see in Europe: the farmer holds the goods, but the trader has already contracted deliveries to processors or end-buyers—and is forced to go back to the market and buy. That causes temporary price distortions: the farmer won’t sell, but the trader must buy.
I gave a typical example in my presentation—rapeseed. In July–August, traders often contract around 300,000 tons for export. Then suddenly, there are July rains and everyone goes, "Oh God!" And the market literally explodes—because the cargo must move, but there’s no rapeseed.
Latifundist.com: So it’s a game between traders and farmers?
Jonathan Grange: Yes, each one plays their hand.
Speaking of change—exports from Ukraine have become easier, and that brought back the “big four”: ABCD (ADM, Bunge, Cargill, Louis Dreyfus). They’re far more efficient. Better finances. High-performance terminals.
In 2023, the handling margin was one thing, but now it’s something else entirely. It’s down. Because if you're one of the ABCD companies, you’re fine with operating at zero margin. Their logic is: market presence equals power and leverage. They can move large volumes without profit—because they gain control, access, and influence.
As for the players you have mentioned earlier—the new exporters—they don’t know how to hedge risk, how to work with Chicago, and likely just bring deals with commercial clients to terminals. And what do they see? No margin.
Now these traders start to nitpick every detail—bargaining for hours over 50 cents, arguing with brokers about every line. But the truth is, the market gradually pushes such players out—and many will simply vanish.
Some of them managed to make good money. But later—as we discussed yesterday about defaults—it’s all part of the process of market self-cleaning. Someone sells something, can’t deliver—lacks resources—defaults—and that’s it, they’re out of the game.
Latifundist.com: Another major shift is polarization. In recent years, Ukraine’s grain trade has largely pivoted toward Europe, while russia has expanded in Africa, the Middle East, and Asia—often through dumping. This can be seen, for example, in wheat. Is this just business on their part, or—as some say—"grain as a weapon" and an extension of geopolitical expansion?
Jonathan Grange: Same answer: price. It’s all about price.
The russian market is distorted—primarily because of export duties, which heavily impact pricing. Also, due to exchange rates. russian farmers saw the ruble drop to 110 per dollar, now it’s back to 79. That’s a 30% swing in revenue just from currency changes.
I don’t think russia is playing some grand diplomatic game on ag markets. No. They’re just selling at the going price. Their entire “strategy” is dumping.
Their biggest challenge right now is Europe’s stance. It started gradually—restrictions, bans, workarounds. But now, the European market is basically closed to russian products. And recently—for two weeks now—ships sailing under the russian flag are not allowed into Northern European ports in the EU.
They’re being squeezed out. That’s why we see russia massively shipping sunflower oil to Iran. Argentina, Ukraine, and Turkey used to be major suppliers there. Now it’s russia—through the Caspian Sea. Likely selling at lower prices than they could get otherwise.
They’re also actively shipping to China. Why? Because of a huge trade imbalance—they import a lot of tech. They need to offset that. It is also they do not have other outlets, so the inland transport, mainly rail, is moving many more russian products than before.
But China won’t let them build a pipeline—it doesn’t want to get involved in that project right now. So russia has one option: sell, sell, sell.
Latifundist.com: Speaking of China—they’re increasing domestic production, registering new GMO lines. Is this a key trend? Because we used to sell non-GMO grain to China and got a premium for it.
Jonathan Grange: China imports 100 million tons of soy—all GMO. They have no issue with GMOs—that’s obvious.
What historically created friction with Ukraine was when Ukraine said, “We are officially a non-GMO country for corn, soy, etc.” Then China says, “How can you supply me with GMO soy if you're a non-GMO country? How can I tell the difference?”
So, I’d say it’s more of a political issue. They perfectly understand what’s going on—but it’s politics, not a blockade.
In practice, we see that—be it corn, barley, or yellow peas—everything eventually gets certification if it meets their phytosanitary standards.
Latifundist.com: We’re still #1 in oil, but russia is catching up—in markets like China and India. How do you view this competition?
Jonathan Grange: Again: price. Yes, russia occupied some territories and includes Ukrainian seed in its stats. But Ukrainian oil is higher quality. When buyers can pay more—they choose Ukrainian.
Let me give an example. In India, Argentine oil was considered “bad” for years—dark, with impurities. But when it got cheap enough, the Indian guys go, “Ah, okay.” If it’s $20 cheaper—they’re happy to buy. Now, even $10 cheaper is enough. It’s always about the balance of price and quality.
Latifundist.com: We have a paradox in Ukraine: sunflower stocks remain high, farmers aren’t selling, raw seed prices are rising, crush margins are zero or negative—and we’re dropping out of the market. Is this a unique situation, or does it happen elsewhere, like in the U.S.?
Jonathan Grange: That’s the market. Sometimes farmers hold their crop—and processors complain. What do they do? Cut processing volumes. Then two things can happen:
Either oil prices go up, restoring margin—processors return to the market and buy seeds. Or farmers realize there are no more buyers—and are forced to wait.
We’re seeing the exact same picture in russia. Sunflower seed was stuck at $1,190 per ton. Everyone said, “We’ll never sell for less.” But yesterday we saw offers at $1,165 from russia. Clearly, farmers are giving in—because they see prices might fall $50 more by September. So they’re thinking, “Oh no, I’m holding this seed—and it’s dropping? I’d be a fool not to sell.” russia could be sitting on up to 3 million tons of seed in storage—and that’s making farmers think twice.
Latifundist.com: Seems similar in Argentina.
Jonathan Grange: Yes, another striking example. Argentina has the world’s largest soybean processing capacity. But in the past two years, the sector has struggled—margins became critically low. Argentine farmers are extremely nervous about inflation and devaluation. They literally think: “I own dollar goods, I own soybeans. That’s my hedge. I won’t sell.” As a result, Argentina has around 7 million tons of last year’s soy still unsold. And the new crop—50 million tons—is almost here.
For the government, that’s lost revenue. So they quickly decided to open an export window for soy and products until the end of June, and cut export duties. That revived the market.
But here’s the irony—farmers who do decide to sell get better prices by exporting soy to China via traders than selling to local crushers. So now Argentina is exporting raw soybeans instead of meal and oil.
I think China has already bought 1.5–2 million tons of Argentine soy—which normally they would not do at this stage, because crushers would be paying a better price.
Latifundist.com: In Ukraine, there’s a debate: should we limit rapeseed exports (with quotas or duties) to repeat the “success” of sunflower oil? Do you think that’s possible?
Jonathan Grange: Introducing export duties on oilseeds is essentially a direct subsidy or incentive for processors to expand capacity.
But this must be done carefully. These decisions should be part of a long-term state policy—looking 10 years ahead. Because if all the government does is raise duties, it's effectively saying to processors: “Here’s free money.” And what do processors do? They just pocket it, slightly increase capacity, and say “thank you.”
We should be asking broader questions:
- Is there a state program or interest in developing value-added products?
- Are there tax breaks for setting up refining capacities?
- Are there tax breaks to boost livestock production?
In other words, the government must support the entire processing chain—not just hand money to processors. Otherwise, they’ll just say thanks and walk off. So it must be a policy, not just a tariff.
The problem is, governments are bad at long-term thinking. They act with a “tomorrow” mindset. Depending on who walks in saying, “I’ll do this or that”—they tend to react.
Latifundist.com: Can you give an example of such a policy?
Jonathan Grange: A very telling case: the EU in the 1980s. Back then, farmers were massively incentivized—prices for all products were artificially high: grain, cheese, milk, meat. Farmers—being rational players—invested in fertilizers and inputs and ramped up production. By the mid-1980s, Europe had millions of tons of grain in storage. The U.S. had a similar situation. They were encouraged to produce with promises like: “There’s a minimum price. If the market falls—we’ll buy it.”
It was absurd. It took decades to find other incentives—like the biofuel system.
But had they truly thought strategically—how to preserve rural economies and farmers—they should’ve just said: “Here’s money. Stay on the land. Grow less intensively but sustainably. If you don’t make money—we’ll support you.”
Eventually, that’s what they did—just 20 years later.
Latifundist.com: I recently read a piece by Reuters ag columnist Karen Braun about the U.S. losing its dominant role in key crops. How does the American farmer doing now?
Jonathan Grange: Overall, the American farmer—whether growing corn, soy, or wheat—plays to the global market. They respond solely to price. They see that corn prices are better than soy—and immediately shift 9 million acres (3.64 million hectares – ed.) of planting from soy to corn. It’s very pragmatic.
The only artificial interference in their economy is the biofuel support programs—ethanol and biodiesel (including HVO—hydrotreated vegetable oil). Those are political decisions, made or unmade depending on the administration. But everything else is pure market competition. The U.S. farmer competes with the Brazilian farmer—and again, it’s all about price.
They have a strong lobbying system for biofuels. But here’s a key point: the entire “corn-to-ethanol” chain is much closer to the farmer than, say, the “soy-to-soy oil-to-biodiesel” chain.
To make biodiesel from soy, the farmer sells to a crusher, who produces oil and meal, and the oil goes to major players in fuel—half of whom are oil companies. That chain is much more removed from the farm. Therefore, farmers and agricultural cooperatives are much more actively involved in the production of bioethanol from corn than in soybean biodiesel.
So there is a view, which I share, that if the farmer had to choose about biofuels, which crop to focus on, there is a thought that in the US, he will go towards corn more than soybean oil. Because it is closer, simpler, more manageable, and generates income directly, rather than through several intermediaries.
Kostiantyn Tkachenko, Latifundist.com