Ukrainian soybean exporters may face difficulties maintaining the pace of deliveries to their traditional markets in the last four months of the 2023-24 season, as abundant global soybean supplies put pressure on prices.

Excess Supply Puts Pressure on Prices

Argus has forecasted that Ukraine will export 3 million tons of soybeans in the 2023-24 marketing year (September-August), with the USDA's projection being 100,000 tons higher.

Ukraine's cumulative soybean exports had reached 2.54 million tons by the end of April, according to customs data. This means that approximately 500,000 tons of soybeans remain to be exported in May-August to meet the full-year projections. By comparison, Ukraine exported nearly 574,000 tons in the same four months of the previous year.

However, the abundant global soybean supply this season has put pressure on prices, including in some traditional destinations for Ukrainian soybeans, such as Egypt and Turkey.

Many buyers are choosing American and Brazilian soybeans over Ukrainian ones, as their products are offered at a discount of $10-15/ton CIF Egypt, a trader told Argus. As of May 14, Ukrainian sellers were offering soybeans at $515/ton CIF Egypt, compared to offers of $505/ton CIF Egypt.

Egypt and Turkey

Ukraine exported approximately 95,400 tons of soybeans to Egypt in March, while shipments in April were 30,500 tons.

The USDA estimates that Egypt's soybean imports will total 2.8 million tons this season, with approximately 1.55 million tons already imported by the end of April, according to Global Trade Tracker (GTT) data. The USA and Brazil provided over 800,000 tons of this total, while Ukraine delivered approximately 700,000 tons from September to April.

Ukraine exported 51,000 tons of soybeans to Turkey in March, but only 4,300 tons in April, according to customs data.

For the entire 2023-24 season, the USDA expects Turkey to import 3.1 million tons of soybeans. From September to March, the country imported 1.47 million tons, with volumes from Ukraine significantly decreasing in March compared to the previous month, while arrivals from Brazil and the USA compensated for this decline, according to GTT.

Overall, Ukraine supplied Turkey with approximately 580,000 tons of soybeans from September to March, GTT figures show.

It is likely that Ukrainian soybeans will continue to be less competitive in the Egyptian and Turkish markets until the end of this season, due to high supplies from the USA and Brazil.

Higher Local Prices

Soybean prices in Ukraine remain firm, with buyers willing to pay $430-435/ton cpt Reni/Izmail for oilseeds in the past seven days. Such prices — once transshipment costs and transportation tariffs are added — make Ukrainian soybeans less competitive on a CIF Egypt and CIF Turkey basis.

As a result, exporters need to look to other markets, such as Germany and the Netherlands. However, deliveries by train and truck through Ukraine's western borders remain logistically complicated, leaving maritime shipments as the only viable option for traders.