Egyptian GASC purchased 120,000 tons of Ukrainian corn at a high price of $185/ton FOB

Yesterday, the Egyptian GASC held an international tender for the purchase of corn, which happens very rarely. Two consignments of Ukrainian corn were purchased on it at a fairly high, for today, price of $185/t FOB.

The following proposals were submitted to the tender:

• 3 batches of Ukrainian corn at a price of $192-209/t FOB Chornomorsk with payment in 180 days or $196-212/t FOB with payment in 270 days,
• 1 batch of Ukrainian corn at a price of $235-240/ton C&F,
• 3 batches of Romanian corn at a price of $218-223/t FOB Constanta with payment of 180 days and $227-288/t FOB with payment of 270 days,
• 1 batch of Moldovan corn at a price of $233/t FOB Constanta,
• 2 lots of Argentine corn priced at $230 and $235/t FOB Rosario – San Lorenzo and $275-280/t C&F.

As a result, GASC purchased 2 batches of Ukrainian corn for delivery March 15 - April 5 at a price of $185/t FOB Chornomorsk + $35.25/t freight = $220.25/t C&F and payment 180 days after the opening of the letter of credit, namely :

• 60 thousand t in the Nibulon company,
• 60 thousand tons in TOI Commodities.

Ukrainian corn remains the cheapest on the world market. But against the backdrop of a decline in demand prices in Asia to $230-240/t C&F and freight costs of $60-65/t, demand prices in the Black Sea ports decreased to $165-175/t FOB, after which prices for deliveries to the port in Ukraine fell to $142-145/t, given the cost of handling $18-25/t.

Egypt's purchase of even a small batch of Ukrainian corn will support its prices, which are falling due to reduced demand from China, where the New Year is being celebrated.

Today's tender in Algeria, where the ONAB agency plans to purchase up to 160,000 tons of corn, will provide new price guidelines for the market. It is worth noting that Algeria only buys corn from Argentina or Brazil.

March corn futures on the Chicago Stock Exchange fell to a 3-year low of $170/t, but traders believe that today's USDA report on US acreage will give a boost to prices.

Currently, the U.S. corn planting area is estimated at 91.6 million acres, down significantly from last year's 94.6 million acres.

A survey of producers conducted by the Ministry of Agrarian Policy of Ukraine showed that in 2024, the area under corn will decrease by 9%, instead it will increase under soybeans (in 70% of surveyed farms) and sugar beets.

Forecasts of reduced corn acreage will support prices, especially if the crop in Brazil is reduced due to adverse weather.