Yesterday on SWOT Chicago Mercantile Exchange the bids on wheat ended with price rises for the September contracts by 4.3% to $8.84 per bushel ($328/t). According to the Association "Ukrainian Agribusiness Club" (UCAB), it is the highest price for wheat over the last 4 years.

Price increase for wheat on SWOT started in early June when the adverse impact of weather strengthened in main food producing countries. Scorching heat in early summer in the U.S., Ukraine and the main regions of production in Russia significantly influenced the yield productivity of major crops in these countries and made experts lower the forecasts concerning the expected yield, particularly wheat.

"This was the main cause of increased cost of wheat on world futures markets, and in June-July the price for September wheat increased from $230/t to $330/t. That means that just for 1,5 months the price for wheat has increased by almost $100/t or by 43% "- UCAB expert of agricultural markets Roman Slastyon said.

Such dynamics in world grain markets caused a rise in prices on the Ukrainian market.

"At present moment, the cost of wheat of the 3rd class is 1750-1800 UAH/t on a customer pick-up, while the starting price of the season was 1500 UAH/t. - Director General of UCAB Volodymyr Lapa said. - However, farmers of the steppe zone believe the price is still low, because due to the adverse weather impact, the production cost of grain this year increased to 1800-2000 UAH/t”. 

Experts claim that the prices on the Ukrainian market are still much lower than world prices and that leads to much lower earnings of grain producers.

Previously, UCAB experts stated that despite the increase in world prices for crops, prices on the Ukrainian market are still relatively low. If the situation does not change soon, farmers will lose about 29 billion UAH in 2012/13 marketing year due to understated sale prices that together with the losses from drought and the increased index of regulatory pecuniary valuation of land will make up losses at the level of 39 billion UAH.

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UCAB Press Office

Tetiana Kotyk

The Association "Ukrainian Agribusiness Club" (UCAB) www.agribusiness.kiev.ua was founded in 2007 to protect the economic and professional interests of players of agribusiness in Ukraine. UCAB is a unique platform in Ukraine for establishing business contacts between the leaders of agribusiness, improvement their work and dialogue with the government. UCAB actively supports Ukrainian producers in establishing and maintaining international business relations. The Association consists of the largest producers and processors of agricultural products in Ukraine.