Around a year ago, the prices for grain, corn and oilseeds peaked. Since then, they have fallen sharply again, which is causing dissatisfaction among farmers. The main drivers of the price development are the globally good harvest prospects, says Franz Sinabell, agricultural economist at the economic research institute Wifo. This leads to the expected higher supply of grain, less scarcity and thus lower prices.
Agricultural officials also blame Ukrainian exports, which are exempt from customs due to an EU exemption, for the price declines. However, Sinabell sees no causal connection here. He refers to the development from January to March, when Ukraine’s exports to Europe fell significantly. The economist admits that in a long-term comparison there are more goods from Ukraine in circulation. But exports were already comparatively high in the previous year and in 2019 – with hardly comparable price dynamics.
On Thursday, wheat was quoted at EUR 222 per ton on the Euronext commodity futures exchange, compared to EUR 438 on May 17, 2022. “It is clear that the grain farmers are angry because the prices for their products are falling significantly, but the costs have not yet fallen,” says Sinabell. Lower incomes than last year are therefore to be expected this year.
Created withVisme Infographic Maker
However, one cannot speak of a “flooding” of the market with products from the Ukraine. It is true that the offer for some producers who have stored goods and have not yet sold them certainly equates to such a situation. “But a flood would mean that the price of wheat in Europe would fall into the abyss within a short period of time. That would be 100 euros per tonne. And we’re still a long way from that.”
