Prices for agricultural products continuing to grow
2011-02-22 18:02:41
The prices of agricultural products are continuing to grow despite the introduction of quotas on grain exports this season. The offer price for third-class wheat in Ukraine has risen from USD 208 to USD 246 per ton since the beginning of this year, Foyil Securities has reported.
Such a sharp rise in prices seems unreasonable at first glance. However, according to Foyil Securities analyst Andriy Yastreb, if domestic prices in Ukraine are compared to world prices, then it turns out that we the domestic market is only catching up the international market. The price of food wheat exceeds USD 300 per ton in the United States and USD 330 in London. "We can say that the introduction of export quotas by Ukraine last autumn could not prevent a rise in prices inside the country, but only delayed the growth," the analyst said.
A rise in the price of wheat immediately affected the price of flour, which has grown from USD 327 to USD 365 per ton (for high-class flour) since the beginning of this year. It is clear that this growth is already leading to a rise in the price of bakery products, the expert said.
A rise in prices was also reported among other agricultural products. For example, the price of feed corn has risen from USD 182 to USD 224 per ton since the beginning of this year. This is due to the fact that prices for these products in the world remain stable, as well as the fact that Ukraine is planning to lift export restrictions on corn.
Since corn is one of the main ingredients for feed production, then an increase in its price will lead to an increase in meat prices in the coming months, Yastreb said.
At the same time, the expert noted that not all the prices were growing. For example, the price of sunflower oil has declined over the past three weeks from USD 1,424 to USD 1,395 per ton.
The wholesale price of sugar also declined - by 2.1% last month, to USD 1,000 per ton. In this case, the fall in prices, according to the analyst, is due to government regulation - the Antimonopoly Committee of Ukraine previously demanded that the producers of sunflower oil and sugar reduce prices for them.
The producers took this into account, although the prices were rising not because of the whim of the producers themselves, but because of the difficult situation with prices for these commodities on the global market, Yastreb said.
The rise in prices for main food products in Ukraine was mainly triggered by low production in 2010, the analyst says. This situation is likely to continue until the next harvest. In the case of a good harvest not only in Ukraine, but also in other countries, a substantial fall in prices can be expected this autumn.