The recent application of retaliatory tariffs of 25% on US corn by both the EU and China is likely to reduce exports from the US to these countries sharply. One potential beneficiary of this is Ukraine, a major corn exporter on the Black Sea. However, lack of clarity on the duration of the tariffs and whether they might suddenly rise or fall creates uncertainty over whether Black Sea exporters will benefit. After the EU and US announced on July 25, 2018, they would work more closely toward 0% tariffs, there might be little chance of Ukraine profiting. High stocks in both China and the EU are another factor indicating Ukraine is unlikely to benefit in the short term. The reduction in potential destinations for US corn is likely to trigger a drop in prices. Consequently, Ukrainian producers might find that other key markets, such as Egypt, start buying even cheaper US corn. Exports to China from both the US and Ukraine have been growing. According to US Department of Agriculture data, China imported 4 million mt of corn in 2017-18 over September 2017-August 2018. Between July 2017 and June 2018, Ukraine increased its exports to China nearly fourfold on the… continue reading
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Source: CTRM Center