Turkish buyers renew interest in Ukrainian wheat as freight drops

Turkish importers have renewed their interest in Ukrainian wheat amid lower freight rates from Danube shallow water ports, market sources told Agricensus.

The price of Ukrainian feed wheat on a CIF Marmara basis has become more competitive after freight rates dropped from $49/mt to $40-43/mt, while a continued increase in freight rates from Russian Azov ports made Russian origin less attractive.

The rate from Russian Azov ports to Marmara has hit $57-58/mt, up from $51-52/mt last week.

However, this revived interest is only true of low-protein wheat, as when it comes to wheat with an 11.5% to 13.5% protein content, Turkish buyers still prefer Russian origin.

The latest trade in Ukrainian 10.5% wheat on a CIF Marmara basis was heard at $218/mt, while Russian-origin 10.5% wheat was offered at $225-228/mt on the same basis.

"People prefer Russian origin, but the Kerch Strait problem can push buyers to start looking for Ukrainian origin," a Turkish-based trader said.

Currently, vessels have to wait 5-10 days to pass the Kerch Strait, which is among the reasons for the continued freight price increase in the region.

"Ukrainian 10,5-11,5% wheat is priced better, however for higher protein, Russian wheat is preferable," another trader told Agricensus.

So far, not everyone sees Ukrainian wheat as more attractive, however, and some would like to see Ukrainian milling wheat offered at a more competitive price compared with Russian origin.

"We finally see Ukrainian milling wheat offers but [they are] not cheaper than Russian," a Turkish-based trader said.

At the same time, Ukrainian sellers are still limited in how far they can lower their offer price levels, as even though there has been a slight weakening in the freight rates recently, ongoing delays in passing the Sulina Canal and strong flows in that direction have prevented them from falling more significantly.