OREANDA-NEWS. March 3, 2008. This week grains market traders activity was highly various.

Part exporters didnЎЇt make any purchases due to having had already accumulated grains big reserves on elevators; these companies planned resuming purchases in late Jan. Other exporters were actively searching both for food wheat (bidding averagely UAH1,350 per MT for 3 class wheat, EXW-ex-elevator) and feed wheat (bidding averagely UAH1,080ЁC1,120 per MT, EXW). This activity may be explained only with global exchange markets high quotations for new grains crop (Aug/07-Sept/07) and physical market still being dominated with tendency towards prices growth. All these factors mean that traders, even despite storage expenditures, will be able to sell wheat in autumn 2008 at very high prices (if grains export quoting remains effective until 2007/08 MY end).
As of now, feed wheat sale/purchase looks more promising than food wheat, ЎЄ since Cabinet can permit to export only feed wheat before new grains crop harvesting. Besides, feed wheat world market prices now remain maximally high, ЎЄ what provides additional support to Ukrainian low-quality wheat market.
Within this week barley trade was slack due to real offers absence. Due to 2007 barley poor crop, main barley lots had been distributed between key consumers still within autumn 2007, ЎЄ what will, most possibly, make barley sector relatively passive until Jul 2008. However, exporters keep hoping for barley export quota raising: as to experts estimation, Ukraine can easily export still ЎЦ 500,000 MT in addition to presently effective quota.
Within this week feed maize market got activated due to export shipments permission.
Traders started declaring purchase prices (though just experimentally so far). Agrarians divided into 2 groups: some tried to sell grains at high prices in order to purchase materials necessary for this year spring sowing campaign in apprehension of petrol products market and seeding materials/equipment next in succession prices growth caused by country economic inflation, ЎЄ while others were quite reluctant to sell their grains lots in expectation of more advantageous prices.

EXPORT
Barley

Feed barley purchase prices remained UAH1,170ЁC1,240 per MT (EXW-ex-elevator, depending on regions). If barley export were free, feed barley US$ purchase prices would range within US$320ЁC330 per MT (FOB)/US$310ЁC320 per MT (CPT port).
Wheat

Feed wheat prices have got fixed at UAH1,070ЁC1,120 per MT (EXW-ex-elevator).
Feed wheat ports US$ purchase prices were just declarative, ranging within US$290ЁC300 per MT (CPT port).
FOB offer prices fluctuated within US$300ЁC310 per MT (FOB).
4 class food wheat US$ prices could (taking into account global market prices current conjuncture) equal to US$330ЁC340 per MT (CPT port).

Maize

Traders renewed feed maize purchasing at UAH1,080ЁC1,130 per MT (EXW-ex-elevator). If maize export were free, feed maize US$ prices would equal to " US$270ЁC280 per MT (CPT port)/US$280ЁC290 (FOB).
Processors Activity

Actually, all processors have started functioning within this week. However, resources purchase/ready products sale was still very slack. The only conclusion to make is that year 2007 appeared to be hard, yet successful and profitable for most agrarians, ЎЄ what makes them unwilling to resume working now, after autumn sowing campaign.
Processors admitted within this week they received only overrated prices wheat offers. Some agrarians offered 3 class wheat at UAH1,500 per MT (CPT plant). Evidently, market tendencies had been influenced by grains export permission (made within limits of export quota efficient until Mar 31, 2008): agrarians hoped that grains prices would boost as soon as export-orientated companies will come to country market.
Processors were purchasing barley only within necessary limits, by small lots. Maize was bought mainly by mixed feeds/spirit plants; it is to be admitted, grain holders were quite reluctant to sell maize big lots as they expected traders would resume big purchases.
Besides, within this week most market operators focused their attention on Government actions targeted at 2008 Agrarian Fund and State Committee for Material Reserves (State Reserve) functioning. Both Agrarian Fund and State Reserve will provide support to State-owned flour milling companies on basis of grains tenders sales, whereas grains are to be sold at prices much down against market in order to curb flour/bakery products prices.
Processed Products

Within this week flour products sale was rather stable with no big trade operations having taken place on market. Probably, this market sector still remained under New Year holidays influence. However, part operators admitted their regular customers had got much interested in flour products purchases.
Evidently, flour market demand will boost in near future: all country goods markets prices have grown and therefore bakeries will try to purchase big flour lots to be on the safe side.
Upon whole, 2007 year appeared to be successful/profitable for Ukrainian flour industry. Certainly, there were many difficulties, yet most companies successfully solved market problems and managed to gain profits as well as get new clients/sale markets. Besides, within last year Ukrainian flour millers were much supported by Georgia/Moldova acute demand.
As to companies operative data, Ukrainian 2007 total flour output had grown to 2,554.800 MT, up 165,100 MT against 2006. However, this figure may become much up after rectification (i.e. after small-scale companies will submit bookkeeping records).