Buyers in Egypt are increasingly shifting their focus to Ukrainian corn on the possibility of lower premiums amid a growing harvest and sourcing smaller parcels to cover the months of December and January as Argentine corn stocks swell.
Over the past year, Egypt has been purchasing corn from Argentina and Brazil due to their competitive prices. However, limited storage and an increasingly weaker consumer market due to high inflation is propelling buyers to reassess their purchasing habits.
“When buying from Argentina and Brazil we usually buy 50,000 mt or 60,000 mt, which makes it hard to store, especially as stocks are reaching full capacity,” a source said.
“With Ukrainian corn, you can buy at the flat price, removing the need to hedge against the Chicago corn futures contract as well as buy smaller parcels of 5,000 or 10,000, making it easier to store.”
Despite new crop Ukrainian corn beginning to make its way to market, buying preference still remains with Argentina and Brazil for Egypt and many other destinations.
“Demand for Ukrainian corn is slight at best; however, we might buy Ukrainian corn on spot if the price is right,” another source said, adding that long-term planning in the Egyptian market now averages around three months due to recent decreasing prices.
Nonetheless, sources expect there to be more activity between Egypt and Ukraine in a month’s time.
Offers from Argentina were heard Wednesday for December shipment to Egypt on a CNF basis on a Panamax vessel around 112 cents/bu ($180/mt) on the Chicago futures contract versus bids at 110 cents/bu ($176/mt).
Indicative values for Ukrainian corn on a coastersize vessel to Egypt on a CIF basis were heard around $190-$200/mt.