“Quarantine seasons” 2019/20 and 2020/21 brought many surprises for participants of grain market – from spontaneous trade restrictions to blocking of Suez Canal. At the same time, high global demand for grains resulted in soaring prices on both world and Black Sea markets.
“Since the start of 2020/21 MY and up to the period of peak prices (late January), the bid prices(CPT-port basis) of milling wheat increased by 65%, of feed wheat by 72%, of barley and corn by 59% and 58% correspondingly. It was a kind of surprise for traders mainly as to the performance of forward contracts”, – Andriy Kupchenko, Head of Business project unit with APK-Inform said.
Moreover, despite the optimistic forecast of the next grain crop set by APK-Inform at 73.6 mln tonnes (+13% to 2020) as well as expected high carry-over stocks at 6.4 mln tonnes (+31% to 2019/20 MY), the prices of the main grains remain high. Besides, the price of corn exceeds the prices of milling wheat.
“The quarantine restrictions remain in many countries, the pandemic reaches new peaks from time to time, the political tension raises in the flashpoints and the global economy is stretched to the limit. Therefore, there will be many new surprises and challenges for the grain market the next season”, – the expert supposes.
The main points to watch are the climate risks, unclear competitive environment and purchasing power of importers. Moreover, grain logistics and trade policy in some key exporting countries will affect the export of Black Sea grain and pricing.
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