Corn Markets Brace for Tight Supply as Ukrainian Ports Remain Closed
- March 4, 2022
- Posted by: Quatro Strategies
- Category: Agribusiness
Ukraine, the world’s fourth largest corn exporter, will have serious difficulties delivering its products to the world market due to the Russian invasion. The invasion also puts doubt on new crop planting, which typically begins in April.
After growing its biggest ever corn crop in the marketing year 2021-22 at 42 million mt., Ukraine’s exports are on their way to a significant drop.
Ukraine, which exports almost 80% of the corn it grows, is estimated to ship 33.5 million mt this year.
Ukraine has exported 18.98 million mt of corn as of February 23, with over 14 million mt still remaining to meet the estimates this marketing year.
As Russian invasion continues, concerns remain over exports of the remaining amount of corn. Ukrainian ports are expected to remain close until the Russian invasion ends, and there are also damage to the country’s infrastructure, which could affect exports.
The timing of the Russian attack coincides with peak export season lasting from March to May.
Possible export disruptions in Ukraine could make the buyers look for alternatives such as the United States. It seems like the only viable option in the market as South American corn harvest is still a few months away.
Corn producers also fear that the invasion could dent 2022-23 production, the planting for which normally starts in April. Ukraine’s corn production for 2022-23 is estimated at 30 million mt, down 12 million mt from 2021-22. The exports are estimated at 23.5 million mt, also down 30% from a year ago.
Russia’s invasion of Ukraine has pushed already high global corn prices to even higher, reaching multi-month highs on key global exchanges.
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