Black Sea wheat prices continue upward, a new season's maximum set
Another series of international procurement tenders and tight supply pushed export quotations for Black Sea wheat to a new seasonal maximum in 2020/21 at 220 USD/t FOB deepwater ports, Refinitiv Agriculture reports.
Strong export demand amid high world prices and shipment rates is encouraging further growth of purchase prices in ports.
"As before, contracts execution on 12.5% Russian wheat is the main driver for the Black Sea market, but prices for Ukrainian wheat of 11.5% protein content are almost at the same level. Along with that, the Ukrainian wheat market is becoming less active, traders are more focused on fulfilling previously concluded contracts," Refinitiv analysts noted.
As reported, purchase prices for Russian wheat in ports returned to the levels of late March last season, when the demand for food on the world market was high. The 2.4% weaker ruble over the week provides additional support for purchases.
Learn more: Wheat Exporters from Ukraine in 1H 2020
Export quotations for Ukrainian wheat on the basis of CPT Odesa soared last week. Market operators explain the rise in prices by high rates of wheat shipments despite the limited supply from the producers.
"Consequently, traders are forced to push up prices to stimulate sales and fulfil contracts," the experts added.
As a reminder, since the start of 2020/21, staple grains export shipment from Ukraine has reached 8.86 mln t. As of Sep. 9, agricultural commodities shipment dropped by 12% YoY.
The Ministry for the Development of Economy, Trade and Agriculture of Ukraine and grain market participants signed the Annex to the Memorandum of Understanding on Aug. 17, setting the limit for wheat export from Ukraine in the 2020/21 season at 17.5 mln t, rye 1 thou. t.