Egypt’s GASC made a rare international tender yesterday for the purchase of corn, during which two shipments of Ukrainian corn were bought at a relatively high price of €171 per ton Free on Board (FOB).
Several proposals were presented at the tender:
- Three batches of Ukrainian corn were offered at €178-194 per ton FOB Chornomorsk with a 180-day payment term or €181-196 per ton FOB with a 270-day payment term.
- One batch of Ukrainian corn was offered at a price of €218-222 per ton Cost and Freight (C&F).
- Three batches of Romanian corn were offered at €202-207 per ton FOB Constanta with a 180-day payment term and €210-267 per ton FOB with a 270-day payment term.
- One batch of Moldovan corn was offered at a price of €216per ton FOB Constanta.
- Two lots of Argentine corn were priced at €213 and €218 per ton FOB Rosario – San Lorenzo and €255-259 per ton C&F.
The GASC purchased two batches of Ukrainian corn for delivery between March 15 and April 5 at a price of €171 per ton FOB Chornomorsk plus €32,73 per ton freight, totaling €204 per ton Cost and Freight (C&F). Payment is scheduled 180 days after the letter of credit is opened. The purchased quantities are as follows:
- 60,000 tons from the Nibulon company,
- 60,000 tons from TOI Commodities.
Ukrainian corn remains the most affordable on the global market. However, amidst declining demand, prices in Asia have dropped to €213 222 per ton C&F, with freight costs ranging from €55-60 per ton. This has led to decreased demand prices at Black Sea ports to €153-162 per ton FOB, subsequently reducing prices for deliveries to ports in Ukraine to €131-134 per ton, factoring in handling costs of €16-23 per ton.
Egypt’s procurement of even a small quantity of Ukrainian corn will help bolster its prices, which have been falling due to reduced demand from China, where the New Year celebrations are ongoing.
Today’s tender in Algeria, where the ONAB agency plans to purchase up to 160,000 tons of corn, will provide new market price benchmarks. It’s worth noting that Algeria exclusively buys corn from Argentina or Brazil.
March corn futures on the Chicago Stock Exchange have dropped to a three-year low of €157 per ton. However, traders anticipate that today’s USDA report on US acreage will stimulate prices.
Currently, the US corn planting area is estimated at 91.6 million acres, significantly down from last year’s 94.6 million acres.
A survey conducted by the Ukrainian Ministry of Agrarian Policy revealed that the corn acreage in 2024 will decrease by 9%. Instead, there will be increases in soybean cultivation (reported by 70% of surveyed farms) and sugar beet cultivation.
Forecasts of reduced corn acreage are expected to support prices, particularly if adverse weather conditions lead to decreased crop yields in Brazil.