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Ukraine’s poor corn harvest is forcing overseas buyers, especially China, to seek out alternative sources for the grain, mainly from the United States.
The corn harvest is nearly complete in Ukraine, which in most years is the No. 1 exporter of corn to China. But persistent dry weather this summer has sharply reduced production. The USDA estimates the Ukraine corn crop at 28.5 million tonnes, down 20% from last year’s 35.8 million tonnes.
As a result, Ukraine corn prices have jumped. FOB prices of Ukraine corn have appreciated 40% versus this time last year, and are up over 25% since early September. More than half of Ukraine’s corn exports head to China.
Ukraine’s domestic feed costs also have risen sharply, and meat producers are petitioning the government to limit corn exports for the 2020/21 season. Restrictions on Ukranian corn exports would force a larger share of Chinese imports to US shores.
Corn is the top feed grain in Ukraine. Its production has grown fourfold in the past 10 years, boosted by both acreage expansion and yield improvement. Corn is typically planted in late April or early May. Harvest begins in late September and is usually nearing completion by early November. China’s reliance on Ukraine corn exports has increased steadily in recent years.
China’s growing demand for feed grain comes at a time when dry conditions are also seen impacting crops in Brazil and Argentina, among the world’s leading producers and exporters. The impact of the South American growing season on 2021 global supply and demand for corn and soybeans bears close watching.
Join Gro’s Research Analysts for a webinar on November 19 as we discuss the outlook for the South American crops, and introduce Gro’s Corn and Soy Yield Models for Brazil and Argentina, which can be used to monitor the growing season and provide insight into the structure of global trade flows in the year ahead. You can register for the webinar here.
This insight was powered by the Gro platform, which enables better and faster decisions about factors affecting the entire global agricultural ecosystem. Gro organizes over 40,000 datasets from sources around the world into a unified ontology, which allows users to derive valuable insights such as this one. You can explore the data available on Gro with a free account, or please get in touch if you would like to learn more about a specific crop, region, or business issue.