European cereals' Mintec Category Index (MCI) reached an all-time high at EUR 347/MT in April 2022, up 67% year-on-year (y-o-y). The index has been on an upward trajectory since the beginning of this year (+34.2%), with maize (corn) and barley prices rising on the back of increasing wheat prices.
Russia's ongoing invasion of Ukraine is one of the main causes of the European cereal price surge. The price increase highlights the critical shortages of wheat and maize on the world market caused by the near-total absence of Ukrainian grain. In addition, dry weather conditions across Europe are adding to concerns for the 2021/22 wheat harvest.
For maize, the European market remains tight. However, European supply is being boosted by a minor flow of Ukrainian maize arriving by land routes via Poland. Also, European countries are accelerating purchases of US, Canadian, Moldovan, and South African maize. The market still awaits the arrival of Brazil's Safrinha maize which could ease the tightness in the market. In addition, President Biden’s announcement to allow the year-round sale of petrol blends containing 15% ethanol across the US to limit fuel price rises, is expected to increase maize use in ethanol production in the US, thus creating bullish sentiment for the global maize market.
Barley prices have also risen sharply following the trend in other cereal markets combined with higher-than-expected global demand for barley.