The increase in price for the mentioned period is relatively small, but stable. In November-December corn in Moldova in particular and in the Black Sea region as a whole was the commodity with the most stable market position in the grain group composition.
The situation is explained by the slow pace of harvesting. In the northern zone of Moldova corn has not yet been harvested from about half of the areas. The weather (high atmospheric humidity, fogs and weak precipitations) is not favorable to increase the pace of harvesting campaign completion. In December, moisture content of corn grain on unharvested fields in Moldova was 19-21%. This is slightly better than in Ukraine, where corn moisture in the field reaches 25%. However, it is still far from the market norm of 12-14%.
High moisture levels force farmers to incur additional costs. Corn drying (1% moisture reduction) at elevators costs farmers about 90-130 lei/t. Accordingly, reducing the moisture content of grain by 5-6% by technical method “eats” a significant part of the potential profit of farmers. Nevertheless, in many cases they have to incur these costs in order to minimize the risk of significant crop losses in the field or during storage.
On the domestic market, the slow development of the final phase of corn harvesting and processing at elevators turns out to be a relatively low supply of this commodity for sale and, as a result, a smooth increase in its prices. According to market surveys, at the end of the second decade of December, the average level of purchase prices for corn in the northern regions of Moldova is 3.15 lei/kg, in the central regions – 3.30 lei/kg, in the south of the country – 3.60 lei/kg. That is, the prices for export corn and wheat in Moldova are almost equal. The price of these goods is about $205-208/t (FOB Giurgiulesti port).
A very important element affecting the competitiveness of Moldovan corn is transportation logistics. Some trading companies of Moldova in November-December used Ukrainian wagons to transport corn from the south of the country to the port of Reni, because tariffs for Ukrzaliznytsia services are more competitive than tariffs of SE “Railroad of Moldova”.
It cannot be ruled out that Russian bombardment of transport and port infrastructure in southern Ukraine, which intensified in December, may significantly change logistics routes and, to some extent, regional dynamics of grain prices.
