Ukrainian Danube prices rise amid complex logistics, tax inspections

Prices for corn and wheat in the Danube shallow water ports increased late last week amid the rising complexity of logistics along with inspections held in the ports by Ukrainian authorities, trade sources told Agricensus.

Despite the freight rates decreasing for vessels leaving Danube ports, the cargo flow has not improved due to other problems such as weather conditions limiting navigation in a move that has not helped to ease huge queues of vessels waiting to exit or enter the Sulina canal.

Trade sources say at least 75 vessels are currently waiting.

But that has come alongside an increase in checks carried out by the Ukrainian authorities in the fight against incorrect taxation in Danube ports - a measure that has piled extra pressure on the activity.

Current circumstances have led to a significant reduction of FOB basis offers in the Danube shallow water ports, traders are now mostly closing previously signed contracts, according to the trade sources.

The lack of offers forced buyers to reconsider their bid ideas, pushing levels higher as they try to tempt sellers out.

Buying ideas for corn on a FOB basis rose from $155-157/mt to $160-165/mt for spot delivery, and the interest ideas for feed wheat also have moved higher to $160-mid $160/mt FOB Reni/Izmail in the space of a week.

Buying interest for corn on a domestic CPT Reni basis was seen at $137/mt amid the $118-125/mt CPT deep-sea ports basis.

While the Ukrainian authorities were said to be holding inspections to check the tax documentation for companies operating in ports for export, the measures are mostly focused on companies trading in cash, trade sources have said.

The investigation is asking companies to supply the documents confirming that tax has been paid, although it appears that other companies were also affected, with vessels being stopped from loading and some cargoes have not been able to be delivered on time.