Ukraine soybeans feel destination markets squeeze

Ukraine's soybean exporters could find it difficult to maintain the pace of shipments to their traditional markets in the last four months of the 2023-24 season, as abundant global soybean supplies pressure prices.

Argus has forecast that Ukraine will export 3mn t of soybeans in the 2023-24 marketing year (September-August), with the US Department of Agriculture's (USDA) projection 100,000t higher.

Ukraine's cumulative soybean exports had reached 2.54mn t at the end of April, customs data show. This means that about 500,000t of soybeans remains to be exported in May-August to hit the full-year projections. For comparison, Ukraine exported nearly 574,000t in the same four months of last year.

But abundant global soybean supply this season has pressured prices, including in some traditional destinations for Ukrainian-origin soybeans such as Egypt and Turkey. Many buyers are choosing US and Brazilian soybeans over Ukrainian, as their products are being offered at a discount of $10-15/t on a cif Egypt basis, a trader told Argus. As of 14 May, Ukrainian sellers were offering soybeans at $515/t cif Egypt, compared with bids of $505/t cif Egypt.

Egypt and Turkey

Ukraine exported about 95,400t of soybeans to Egypt in March, while April shipments were 30,500t.

The USDA projects Egypt soybean imports at 2.8mn t this season, with about 1.55mn t already imported by the end of April, Global Trade Tracker (GTT) data show. The US and Brazil supplied more than 800,000t of that, while Ukraine delivered about 700,000t in September-April.

Ukraine exported 51,000t of soybeans to Turkey in March, but only 4,300t in April, according to customs data.

For the whole 2023-24 season, the USDA expects Turkey to import 3.1mn t of soybeans. In September-March, the country imported 1.47mn t, with volumes from Ukraine significantly down in March from the previous month, and arrivals from Brazil and the US offsetting this drop, according to GTT.

In total, Ukraine supplied about 580,000t of soybeans to Turkey in September-March, GTT figures show.

Ukrainian soybeans are likely to continue to be less competitive on the Egyptian and Turkish markets until the end of this season, because of large supplies from the US and Brazil.

Higher local prices

Ukrainian soybean prices remain firm, with buyers ready to pay $430-435/t cpt Reni/Izmail for the oilseed in the past seven days. Such prices — once transshipment costs and freight rates are added — make Ukrainian soybeans less competitive on a cif Egypt and cif Turkey basis.

As a result, exporters have to look to other markets, such as Germany and the Netherlands. But deliveries by train and truck through Ukraine's western borders remain logistically complicated, leaving sea shipments the only viable option for traders.

That said, with only about 500,000t of soybeans left for Ukraine to export to reach the 2023-24 projections, the available selling opportunities may be enough to hit the target. Even with decreased Ukrainian shipments to Egypt and Turkey, Ukraine April's exports of the product — at 134,000t — were in line with the five-year average of about 133,000t.

By Kristin Yavorska

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