Following weeks of anticipation around the future of the grain corridor deal, Russia officially halted the deal on 17th July 2023. As mentioned in a previous update, the grain corridor was a ‘long gone’ deal as the export levels by sea transport through the deep-sea ports of Ukraine remained low for several months. The CBOT wheat futures price increased by 3.4% to $6.84 a bushel and corn by 2.3% to $5.26 a bushel after the announcement on the day. Market players believe price volatility could persist, but it would be short-lived as the supply situation (for corn and wheat) is much better than in the immediate months after the Russia-Ukraine war started.
Mintec learned that there has been increasing activity on the Danube ports, which are not part of the grain corridor deal. Currently, Danube ports can handle only small shipments of less than 5,000 metric tonnes, and market players are reporting that the main effort in the new season (July 2023 – June 2024) will be focused on increasing the capacity of the Danube ports. According to market players, the grain terminals on the Black Sea are full of grain from the 2022 season, which needs to be unloaded to start receiving the 2023 crop. Currently, last season’s supply is shipped via Izmail and Reni ports, but throughput is reported to be not very good. There is a plentiful grain supply expected from the key producing and exporting countries like Russia, the EU and Brazil. To mitigate the disruption, grain buyers will likely switch to alternative origins at this point.
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