June 13, 2024

Spain's demand for Ukrainian corn could increase prices

Spain, Europe's biggest corn importer, has showed robust demand for Ukrainian corn, potentially lifting prices for the commodity.

A report from S&P Global indicated that Spain's import of Ukrainian corn has surged by 68% in the first six months of the 2023-24 marketing year (October to September), compared to the same period in the 2022-23 marketing year. Spain remains the largest corn importer in Europe, driven by strong feed demand, contributing to the upward pressure on Ukrainian corn prices.

The impact of this development on global corn prices is still uncertain, as multiple factors are influencing crop production worldwide.

Additionally, Argentina, another major corn producer, might see an increase in supply due to colder weather conditions. The country had previously faced a significant leafhopper infestation that threatened to disrupt corn production. Argentina, the second-largest corn producer globally, could have seen a substantial decline in production, potentially driving corn prices higher.

Following the outbreak, the Rosario exchange, where corn is traded in Argentina, reduced its production forecast by 20%, according to an agriculture report. However, the cold temperatures could mitigate the infestation's impact by killing off a significant portion of the leafhopper population.

Argentina's Rosario exchange said that low temperatures spread not only in the centre of the country but also to the north, with temperatures below 4 °C and frost in several places. The exchange noted that these below-zero temperatures and frost help reduce the leafhopper pest's presence.

-      VettaFi