• Ukrainian farmers are using inputs like fertilizer more aggressively to increase yields.
• Capital spending on port facilities and export capacity is also increasing as multi-national exporters invest in the region.
U.S. exports are likely to face strong competition from Ukrainian corn and feed wheat exports, reports Cary Sifferath, USGC regional director.
“With a record corn crop this year and plenty of feed quality wheat to sell, I would now say Ukraine will have 10 million metric tons (394 million bushels) to as much as 12 mmt (473 million bushels) of corn and 7 mmt (257 million bushels) of feed wheat available for export,” he said.
Ukrainian farmers are using inputs like fertilizer more aggressively to increase yields. Capital spending on port facilities and export capacity is also increasing as multi-national exporters invest in the region, but Sifferath warns that rail and export facilities could still prove a bottleneck for moving such grain volumes.
“It wasn’t that long ago the multi-national grain companies were wondering if Ukraine was a safe place to invest in facilities, since the government can restrict exports, as it did in 2010,” he explained.
In October, Ukrainian President Viktor Yanukovich cancelled export duties for wheat and corn that had been imposed in July, and Ukrainian officials have talked of exporting 27 mmt of grain in 2011/12.
Much of Ukraine’s corn and feed wheat is likely to go to the Mediterranean region, to Israel, Syria, as well as the North African and E.U markets. Sifferath suggested, “Israel has been a big feed wheat user in the past and is likely to be a big buyer because of low transportation costs from the Black Sea."
“Egypt, Algeria and Morocco are restricted from importing wheat for feed use, and sales to the EU’s Mediterranean nations will depend on pricing.”
“We know the Japanese and Taiwanese have purchased some Ukrainian corn,” Sifferath said, "and Ukrainian feed wheat may have traded into Southeast Asia.”
He noted that feed wheat could also go to South Korea and even China, if the Chinese choose to buy wheat instead of corn to build their grain reserves.
There has also been speculation about yellow corn sales to South Africa.