Ukraine’s corn exporters eye opportunities in China-US soy spat

Ukraine’s corn exporters are looking to the fallout from a potential US-China trade war to rekindle Chinese demand for Ukrainian corn, market sources told Agricensus Wednesday.

"Ukrainian corn and sunflower meal sellers have been disappearing one after another… for corn, they are expecting Chinese demand to pick up," one market source said, with sunflower meal sellers also eyeing the situation.

"A few sunflower meal vessels have already sailed to China in 2018," the source continued, although anticipated a lull in meal exports as Ukraine’s crushers have already sold most of their 2017/18 supply.

"If the taxes become reality, China would try to find other goods to switch from US beans, sorghum and corn," a second source said, with Ukraine already the biggest exporter of corn to China.

"There could be more demand for corn and barley," the second source said.

Ukraine’s corn exports saw a substantial rush to China in November 2017, when over 530,000 mt departed, but December exports slowed versus previous years while January volumes at 86,000 mt were broadly in line with 2017.

Poker face

While South America is ideally placed to cater to China’s soybean needs, corn exports are complicated by tough phytosanitary requirements that can be difficult to meet.

"We will still have to compete into other destinations, and now the US will have a bigger export surplus… [Ukraine] sells into China, and they are left alone hunting in the zoo," a South America-based source told Agricensus.

Ukraine corn exports to China peaked in the calendar year 2015 at 3.1 million mt but had declined to 2 million mt by 2017 as China worked to clear out its substantial corn stocks.