Ukrainian corn sells cheaper than U.S., Argentine products on global markets

MOSCOW. Feb 15 (Interfax) - Ukrainian corn sells cheaper by $20 per tonne than U.S. and Argentine products on global markets, which is an abnormal situation that prompts Ukrainian farmers to inhibit sales, Ukrainian media said, citing analysts from the Ukrainian Agri Council's Pusk cooperative society.

"Ukraine actively sells corn, and substantial amounts have been contracted in January-February. Market operators fear that Argentina might increase corn supply to the global market, which will deteriorate conditions for selling Ukrainian grains," the analysts said.

CIF prices are plummeting, as the Ukrainian corn supply is high and the demand is low, they said.

According to the experts, Ukrainian corn is sold for $200 to $210 per tonne in Europe, compared to $220 per tonne of U.S. corn.

"The gap of $20 per tonne is abnormally large. Ukrainian corn is too cheap on global markets, compared to U.S. and Argentine products, and there are no objective reasons for such an imbalance," the Ukrainian Agri Council said.

At the same time, the CPT market is not yet active; many farmers are holding back corn and do not want to sell it at low prices. In Odessa ports, CPT price tags are in the range of $147 to $155 per tonne, versus $150 to $155 per tonne in the small Danube ports.

Large market players have taken a break from corn trading, while small and medium-sized traders are active in the market. Since CPT prices are so low that they make corn trading unprofitable for the average farmer, many farmers are ready to postpone the sale of corn until summer or even the next season. Although Ukraine has significant reserves of corn, about 17 million tonnes, the volume available for sale is an open question, the Ukrainian Agri Council said.