Buyers of animal feed corn (maize) have rushed to book European Union supplies to replace Ukrainian exports blocked by Russia’s invasion, traders said, but with the bloc also sensitive to loss of Ukrainian supply they may soon have to look elsewhere.
“A big hole has suddenly been blown into the supply schedule of feed makers, including in Benelux, Iberia, the Middle East and North Africa,” one trader said on Tuesday.
“Since the invasion, some corn consumers and traders have been compelled to buy alternative supplies at basically any price.”
Corn futures on Euronext have surged, with the spot March contract setting a new all-time high on Tuesday for a Euronext maize contract at 333.50 euros ($371.55) a tonne.
Major EU corn producers, particularly Romania, Bulgaria and France, have been a first option for importers to replace Ukrainian supplies.
But the EU as a whole is usually a net importer of corn for its livestock sector, with Ukraine one of its main suppliers. The bloc’s agriculture ministers will hold a special meeting on Wednesday to discuss the impact of the war in Ukraine.
“Volumes are difficult to assess but I think we are talking about hundreds of thousands of tonnes. Every day Ukraine’s ports are blocked means about 100,000 tonnes of corn is missing from world markets,” another trader said.
One problem is that some vessels left Ukraine quickly as the conflict broke out while only partly loaded or lacking full documentation, according to traders.
“Importers in several EU countries are in talks with their national governments to see what can be done with these vessels,” a third trader said.
With the EU’s own corn surplus relatively limited, importers may have to look further afield.
Low stocks in Brazil after drought hit production may push more demand towards the United States, traders said, noting China was thought to have several million tonnes of Ukrainian corn booked and due for shipment in the coming months.
“The big question is what China will do if its large corn purchases from Ukraine cannot be shipped out,” the second trader said.
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