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In the beginning of harvest, prices are on a bearish trend

September 15, 2017 at 1:28 PM , Starry Night Ltd.
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SOFIA. The expected higher output and the higher carry-over influenced prices. At the very start of harvest, prices dipped.

SOFIA. Marketing season 2016-17 was characterized by a relatively slow rate of export activity (1,009,611 mt) because of tough regional competition. Local prices were kept high and as a result, the majority of the crop was consumed on the local market (1,263,000 mt). Last season’s carry-over reached 400,000 mt while this year’s stands at 480,000 mt.

Harvest 2016-17

(01.09.2017 - 08.09.2017)

Carry over

480,000 mt

Domestic output

86,205 mt

Domestic consumption

26,000 mt

Exports to the world

8,400 mt

Source: Bulgarian Ministry of Agriculture

Corn: prices started low

Season 2016-17 was closed at prices of about 0.148 EUR/kg EXW Bulgaria. Currently, in the second week of harvest, prices stand at about 0.139 EUR/kg EXW. The higher carry-over and the expected bumper output this year are already exerting downward pressure on prices. By the end of harvest, farmers do not expect drastic upward shifts. It is still quite early during harvest, but according to the Ministry of Agriculture, estimated average yield stands at 5.27 mt/ha, which is just 3.3% higher than the yield from harvest 2016-17.

The dynamics on the grain export market from last year could well build up again this season. Because of higher than expected exports of wheat – the country exported 4,168,623 mt of wheat – during the previous season, the local feed industry turned to corn as a substitute. Farmers could withhold the crop from the market longer than they did with wheat, barley and rapeseed since no further grains will be harvested after corn. Yet, it will be the intermediary parties that will face the challenge in the long-term.

Corn, Bulgaria

Crop

EUR/kg

corn

0.139

EXW Bulgaria

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