Stable demand for Ukraine wheat preserved as Russia introduces wheat export limit
The momentum of wheat exports from Ukraine remained firm during the week to Feb. 14 despite the ongoing uncertainties with Russia, but export prices have slumped over 4% on the month, S&P Global Platts reports.
Wheat export shipment from Ukraine since the start of 2021/22 has increased by 33% YoY, to 17.5 mln t.
Learn more: TOP 14 Wheat Exporters From Ukraine in 10M 2021
Ukraine's wheat exports were expected to jump sharply on year due to globally tightening supplies. However, the ongoing tensions with Russia may cast a shadow on its export campaign, one trader told S&P Global Platts.
Despite the face pace of shipments, Ukraine's wheat export prices have softened over the month and declined $13/mt due to the uncertainties over the tensions between Ukraine and Russia. Apart from the tensions, prices also fell due to logistical concerns like port closures amid snowfall.
S&P Global Platts assessed FOB prices of 11.5% protein wheat from Ukraine at $306/mt on Feb. 14, down $1/mt on the day.
Despite the tensions, traders expect the demand for Ukraine's wheat may recover in the near term as Russia imposes its export quota from Feb. 15 to limit wheat shipments at 8 mln t between Feb. 15 and June 30 to limit domestic price rise.
An export limit from the world's largest wheat exporter will further tighten supplies and may boost demand for the Ukrainian grain.
"Demand for Ukrainian wheat may remain firm in the near term as the Russian export quota kicks in today," a Kyiv-based trader said.
Previously reported that 11.5% and 12.5% wheat FOB Berdyansk reached 284-285 USD/t and 288 USD/t, respectively, as of Feb. 15.
As a reminder, wheat export from Ukraine in 2021/22 was limited to 25.3 mln t. The Memorandum of Understanding was signed by the Agrarian Ministry and grain market participants. The Government also considers milling wheat export from the country. The decision was reported to be taken in January, but it has not happened yet.