Ukraine forecasts wheat price increase

Ukraine has harvested over 14.7 million tonnes of wheat from 3.5 million hectares of land. Contracts for the purchase of Ukrainian wheat have been established not only for August but also for September, with prices showing an upward trend.

Source: the PUSK analytical cooperative, established within the Ukrainian AgriCouncil (UAC)

Quote: "On CPT markets, wheat prices are seeing an increase of US$5-6 per tonne, whereas on CIF markets, the rise is only US$1. Typically, CIF market prices increase first, so this situation suggests that traders are facing issues with contract coverage. As a result, traders are encouraging farmers with higher prices," note the analysts.

PUSK forecasts that this local imbalance may last for about two weeks. In the seaports of Odesa, indicative wheat prices for the coming week will range from US$175 to US$189 per tonne on a CPT basis, and from US$205 to US$215 per tonne on a CIF Constanța basis.

The report states that wheat prices are expected to rise in the long term. A significant factor supporting this upward price movement will be the global decrease in grain production. 

"European grain markets are showing instability. The EU is expected to see a reduction in wheat production by 10 million tonnes, Russia by 10 million tonnes, and Ukraine by 3-4 million tonnes. Only the USA is projected to increase production by 4 million tonnes, which will not offset the declines in the EU and Russia. Therefore, global prices are likely to rise amid decreasing production," PUSK added.

Background: The Ministry of Agrarian Policy forecasts a significant decrease in the yield of late crops due to the abnormal heat in July.

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