Wheat exports are stagnating

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Zdravko Šajatović from the association “Žitounija” expects that the price of grain will now be falling because the offer grows before the spring sowing, when producers need money

At the Novi Sad Product Exchange last week, corn recorded a slight drop in prices, while soybeans and wheat were not traded. According to their report, fertilizer prices have been falling. The supply of urea was higher, which led to lower prices. Corn was the most sought-after primary agricultural product in the past.

On the demand side, exporters and traders showed the most interest, while the interest of domestic processors was not emphasized in the purchase of this grain. The weighted price in this period was 26.89 dinars, per kilogram, which shows that compared to the previous period, corn fell by 0.42 percent.

Soybeans, after a long time, were not traded on the Product Exchange, but experts say that this oilseed has a stable price level compared to the previous period.

– The wheat market is still without significant changes. The supply is noticeable in relation to the demand, due to the reduced interest of exporters and domestic processors in buying this grain – the report says, noting that exporters have not been able to fit into domestic prices for a long time, which is the reason for lack of demand. At the same time, buyers from the region are also postponing purchases of new quantities. Grain offers ranged from 30.5 to 31 dinars per kilogram, and the Product Exchange warns that this situation on the domestic market indicates a possible drop in prices.

They emphasize that unusually low turnover was noticeable on the stock exchange last week, and the reasons are more non-working days due to holidays, as well as reduced activities of commodity exchange participants on the domestic market.

In this period, last year, the first projections for the world supply and demand of wheat in the past economic year predicted an above-average level of trade in the cereals market. Have domestic grain producers benefited from this situation and what do new opportunities say, ie stagnation in grain sales. It is known that last year’s crop can be sold until April, the longest until May, and after that it is difficult. According to the data of the association “Žitounija”, from July 2021, about 670,000 tons of wheat of a new kind have been exported so far.

– Now we have a lull, but the supply is generally higher than the demand, there is no traffic. Exports to Constanta currently stand in January and February, because the domestic price is high and exporters do not fit in and do not buy – says Zdravko Šajatović from the association “Žitounija”. The only thing that saves us is the export to Italy. They have bought more than 200,000 tons so far, about 260,000 tons went to Constanta and we sold the rest to the markets in the region. Sajatovic expects that wheat prices will now fall because demand has decreased.

– At the same time, we will have a bigger offer. As spring sowing approaches, primary producers need money. It is difficult to predict at what level the price will remain because it is influenced by the international situation. The political events in Ukraine and Russia, which are large producers of wheat, are especially burdensome – our interlocutor emphasizes. He adds that so far, producers have not wanted to lower grain prices.

– The state intervened with flour and bakeries, while wheat producers had a free price. The last one was 31.5 dinars, without VAT, and that is obviously the upper limit. Although it is difficult to predict, it is obvious that the price has “stopped” and that a reduction will follow, but no one likes that – notes Šajatović.

As an example of uncertainty in the sale of stock exchange goods, he cites the situation with soybeans, which at one point reached a price of 81 dinars, and then many did not sell it, expecting an increase.

– Now soy is 74 dinars and they don’t know what to do. In the case of stock exchange goods, you either win or lose, it is a matter of assessment – says our interlocutor, Politika writes.