Ukrainian wheat cheapest on global market - Kiev

MOSCOW. Feb 21 (Interfax) - Export sales of Ukrainian wheat are growing, as over 2 million tonnes have been contracted since early February, which may become a record volume of supplies for the season, while 1.4 million tonnes of wheat has already been sold for March, Ukrainian media reported, citing the Ukrainian Agrarian Council's (UAC) Pusk analytical cooperative.

"Traders say that Indonesia is very actively involved in the Ukrainian feed wheat purchases. It has exorbitant price tags on the domestic market and is interested in importing grain. The price of demand from Indonesia is $260-$265 per tonne CIF," the analysts said, adding that it is very profitable to export Ukrainian wheat to Indonesia.

The conflict in the Red Sea, where there is a high risk of shelling of the merchant fleet, is a 'spoon of tar' in these plans, they said. This is still a systemic problem that negatively affects trade in the Black Sea and the Mediterranean. The risk deters Ukrainian traders from operating in this direction.

"There is an expectation on the market that the passage of ships across the Red Sea could come to a complete halt in the second half of March. A logistical solution could be the bypass of ships by sea across Africa, but this will raise the cost of freight by $10-$12 per tonne," Pusk said.

Experts also noted that Ukrainian wheat remained the cheapest on most international markets.

Ukraine sold wheat with a protein content of 12.5% to Egypt for $224 per tonne with delivery to the country last week. Ukrainian wheat is very cheap against grain of other origins on the markets of the European Union, Egypt, and Turkey. Traders are trying to keep prices lower so that it makes sense to trade on many basis. Price gaps are large, which keeps the CPT market at low levels. However, there are more and more sellers on FOB basis for wheat, many farmers are willing to sell it at $195 per tonne in the Danube ports. At the same time, wheat costs conditionally $175-$188 per tonne on CPT terms and price tags may lose another $2 per tonne by the end of the week, the Pusk analytical department said.