Corn: Prices have added incremental value
January 26, 2018 at 2:51 PM ,
Starry Night Ltd.
BULGARIA. According to the Ministry of Agriculture, the average purchasing price of corn rose to 0.140 EUR/kg EXW Bulgaria, which on a weekly basis represents an increase of 1.5 EUR/mt. Yet, current prices still lag behind substantially from those of last year at that time, which were as high as 0.148 EUR/kg EXW Bulgaria. Recently, local prices have been slowly, but stubbornly adding incremental value. A hike in the short-term is too much to hope for, and intermediary market players are not delusional, but a persistent climbing price trend has been already traced out during the last several weeks.
Corn: current market situation and potential
As has been forecasted from early in the marketing season, local demand for the grain has substantially increased. By the 19th of January 2018, total domestic consumption reached 505,000 mt, which on a year-to-year basis is by 20.24% higher. The trend is expected to continue, as the great majority of feed wheat has been exported, and local mills turn to substitutes. However, domestic demand alone could not deplete remaining reserves, as was proven during the previous year, leaving quite a high carry-over inventory for the beginning of the current marketing season in the amount of 580,000 mt.
|
Harvest 2017-18 (01.09.2017 - 19.01.2018) units in MT |
|
|
Beginning availability |
580,000 |
|
Aggregate output |
2,315,387 |
|
Imports |
5,683 |
|
Domestic consumption |
505,000 |
|
food & industrial usage |
190,000 |
|
feed |
315,000 |
|
Exports to the world |
657,599 |
|
to EU markets |
542,151 |
|
to rest of the world |
115,448 |
Source: Bulgarian Ministry of Agriculture
Although total exports – marine and land – have recently experienced a dent in volumes, by the 19th of January 2018, shipped quantities reached 657,599 mt or by 7.5% lower in favor of those of last year, sea shipments recorded a substantial increase. According to local authorities, by the end of last week, shipped volumes, via Varna seaport, reached 296,291 mt or by 95.3% higher on a yearly basis. The decrease in total exports should not be read as a signal of what could become a prevailing trend in the short-term. No, withdrawing corn from the export fronts, local intermediary market players might actually trigger a further increase in the price of corn. By the end of last week, the country has remaining reserves of 1,738,471 mt.
View related articles
