Corn producers in the eastern regions of Ukraine have found themselves in the most difficult conditions due to the high cost of logistics. The significant distance to the western borders limits sales opportunities.

This is reported by the analytical department of the agricultural cooperative FUAC (First Ukrainian Agricultural Cooperative), established within the Ukrainian Agri Council (UAC).

"The greatest logistics risks on the corn market are currently concentrated in the eastern regions of Ukraine. Due to the significant distance to the western borders, transporting grain by rail will require substantial costs, which will complicate its sale. In fact, producers from the east will have to take into account the long logistics leg when choosing a direction for selling corn. Under such conditions, an alternative to the western borders may be transporting grain via the Danube. Another option is selling grain to domestic processors," note the analysts of the FUAC cooperative.

The difference in delivery cost is already affecting purchase prices depending on the region. In the central part of the country, price levels are noticeably higher, whereas in the east the logistics factor puts stronger pressure on the market.

"A rather significant regional difference in prices is observed. In the central regions, at elevators they amount to about UAH 6,500/t, whereas in the east levels of UAH 5,500–5,800/t are being named. At ports, prices for large consignments of corn are approximately in the range of $170–180/t. At the same time, those high price levels that were available to producers until quite recently are gradually disappearing from the market. Therefore, the opportunities to sell corn at a more attractive price are narrowing," the FUAC analytical department emphasizes.

An additional load on the market is expected with the unfolding of the harvesting campaign. According to FUAC's estimate, the corn harvest may exceed 30 million tonnes, and from approximately September 20–25 the grain will begin to arrive on the market more actively.

"No significant weather risks for corn are currently observed, so there is a high probability that the grain will arrive with basic indicators and will practically not require additional drying. This will accelerate the arrival of the new harvest on the market after the start of the active phase of the harvesting campaign. Approximately from September 20–25, the supply of corn may rise sharply, and significant volumes of grain will be simultaneously directed to elevators, to ports, and to the western borders. Accordingly, the logistics system will have to ensure the transportation of a significantly larger volume of corn. With weak logistics, this will become one of the key challenges for the market," the FUAC analysts believe.