0733 GMT December 05, 2019
According to sources, around 411,600 tons of corn have been either loaded or are expected to be loaded through April with Iran as the nominated destination, with about 712,000 tons already sailing over the course of the marketing year, agricensus.com reported.
The move could spell bad news for Brazil, which has seen a roaring trade in meeting Iranian demand in recent months.
While Ukraine’s FOB prices have remained higher versus other origins, there are signs that interest for suitable cargoes for Iranian buying is being seen in the market.
“I see great demand for May, June and even July,” one broker told Agricensus, although deals have slowed in recent days as corn prices globally plunge and Ukraine FOB prices have been slow to follow the price lower.
“What is worrisome is that now there are no new deals, although the demand is there but Ukraine sellers will have to go down,” a second broker added.
Iran has been subject to ramped up US sanctions. That reportedly made Ukraine’s corn exporters wary of selling into the country, despite a series of tenders mounted by the state importer SLAL as the country sought to import up to 300,000 tons of corn per tender.
Funding has been one of the main obstacles facing Ukraine exporters, with only two European banks said to be prepared to provide trade finance when it comes to dealing with Iran, according to a market source.
Iran is already the biggest buyer of Brazilian corn, with the South American country seemingly unfazed by the arrival of sanctions and current line up data shows 459,568 tons of corn is currently loading or waiting to load in Brazilian ports.
For Ukraine, the boost through April could set the seal on another impressive monthly export figure despite the end of the marketing year rapidly approaching, traditionally a time when export pace may slow down.
The signs that Ukraine is stepping into the Iranian supply chain is likely to slow exports from Brazil just as the country prepares to harvest its own huge corn crop, which could ultimately total 100 million tons.