09 May 2024, Thursday, 13:20 305

Ukrainian Agri Council predicts record-breaking rise in wheat prices in new season

Editor: Daria Zubkova

Читати українською

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The Ukrainian Agri Council (UAC) predicts a record-breaking rise in wheat prices in the new season against the background of a decrease in its production in Ukraine and the world, as well as a decrease in stocks.

This is stated in the message of the UAC, Ukrainian News Agency reports.

According to the report, the supply of wheat will decrease significantly in the new season.

Thus, its reserves in Ukraine do not exceed 5 million tons, while last year at this time they amounted to 8 million tons.

"According to the first estimates, production will not exceed 19-20 million tons compared to 23 million tons that were harvested last year. Accordingly, Ukraine will be able to export no more than 13-14 million tons in the new season. The EU expects a decrease in wheat production by 10 million tons, in the USA - also a decrease. In some countries, forecasts are lowered due to the weather, and in particular, in the USA, wheat was not profitable for farmers, so it was sown less. Since stocks and production are decreasing, we have minus 2-3 million tons of export potential in Ukraine - these are objective factors for the fact that wheat will be more expensive in the new season. Prices at the level of USD 200-210 per ton of food wheat are the minimum that we will see already in autumn and winter. Weather risks will additionally "push" the stock market and traders,” the message says.

Thus, according to analysts, the demand and price for food wheat is already increasing, buyers are accumulating stocks.

At the same time, another factor contributing to the activation of trade in Ukrainian wheat is the decrease in the cost of logistics.

"Recently, the freight price has lost USD 2-4 per ton every week. This has a positive effect on wheat prices on the CPT market. Due to this, we see an increase in grain trade. Let me remind you that May-June is often marked by downward trends on the physical market, especially on the basis CPT. But for the new season, as already mentioned, food wheat can reach record prices, which will happen no earlier than September," the message says.

As Ukrainian News Agency earlier reported, the Ministry of Agrarian Policy and Food forecasts a 10% decrease in the yield of grain and leguminous crops, or 8 million tons, to 74 million tons in 2024 compared to 2023.