Ukraine buys Brazilian soybeans amid tight supply

Ukrainian crushers have reverted to soybean imports, having purchased a vessel of Brazilian supplies amid tight supply and high prices in the local market.

A cargo of 51,600t of Brazilian beans has been purchased by a Ukrainian oilseed crushing firm, with the vessel expected at one of Ukraine's deepwater ports in late March, market participants told Argus.

It is believed that some of the purchased beans will be crushed by the importer, with the rest offered to other Ukrainian crushers on a cif basis.

This purchase came as no surprise amid expectations that the country would ramp up its soybean imports following a sharp reduction in local bean production in the past few years.

Ukraine's 2020-21 production fell by 15pc on the year to just 2.8mn t, its lowest since the 2013-14 marketing season, which resulted in tight availability, along with a sharp increase in local prices.

Given that 1.07mn t of soybeans were exported from Ukraine in September-January, the country's soybean stocks began this month at just 1.04mn t, down by 18pc year on year, according to Ukraine's state statistics service, with about 370,000t stored at crushing plants.

But actual soybean stocks could be well below these official levels, with about 530,000t crushed in September-January — twice as much as the officially crushed volume — according to market participants.

Tight supply has led to a 68pc increase in local cpt soybean prices, which surged to 19,300 hryvnia/t ($693.8/t) from HRN11,500/t ($415.4/t), including value-added tax (VAT), from 1 September 2020-19 February 2021, data from Argus' agricultural division Agritel show.

Such sharp growth in prices encouraged Ukrainian crushers to look for overseas soybeans. With prices for Brazilian soybeans delivered to Ukrainian ports standing at around $560/t, it has been more profitable to import beans than buy in the local market.

This is not the first time that Ukraine, the largest soybean supplier in the European market, has imported supplies — the Pology oil extraction plant took 20,000t of Brazilian soybeans in May last year.

By Victoria Blazhko