Wednesday, August 17

Lonja de Extremadura: the cereal market, “broken” by the war in Ukraine


Wheat harvest in an Extremaduran field. / TODAY

The current situation presents a cereal market where volatility prevails. There is no lack of supply, but prices change “hour by hour and minute by minute”

Like every Tuesday and every Thursday, the Extremadura Agricultural Market has submitted its price comments. This week, they have focused exclusively on cereals, although, as their manager, Alonso García de la Puente, has wanted to make clear, it is an “evolution that is not reference prices”, since prices are constantly fluctuating.

A couple of weeks ago, García de la Puente already warned him: “It is too soon to know what repercussions all this is going to have, but I can say that, whatever there are, they will not be good for Extremadura.” In fact, he indicated that Ukraine bought 25-35% of corn, 60% of sunflowers, 15-20% of wheat, and vegetable oils and legumes. “Obviously it will affect. And Spain produces, but even so we are deficient. This country has always been the breadbasket of Europe. What is in the production of sunflower seeds, flour and oil… they can, or could, be the world number one».

After this context, last Tuesday’s comment on cereals goes the same way: uncertainty in a “broken” market where we cannot talk about prices, but only about evolution given the current volatility.

«Our Market of Extremadura listed last Thursday, holding the Price Table coinciding with Agroexpo. There were many national markets that did not list this week, but even so, prevailing the responsibility to inform professionals about the market situation, our market listed », he explains.

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Thus, given the market situation, these prices were validated for that Thursday, March 3 at 1:00 p.m., since the market, he insists, “is broken.” Now, what it touches is to look for new markets to try to guarantee the supplies of cereals, because, as García de la Puente assures, “there are many commitments and contracts that are being canceled given the exceptional circumstance in which we find ourselves, with a scenario in which the volatility of prices prevails. And to which, on top, is added the current drought.

As for Thursday, “an effort has been made to convey to professionals the evolution of the cereal trade, prevailing the principle of the Lonja Agropecuaria de Extremadura and its Cereal Price Table, informing and being notaries of the markets”, recalls its manager .

And it is that the market is so volatile that Thursday’s prices could be valid for the moment in which the Price Table is held (March 8 at 12:00 p.m.) but that, after a few hours, “they necessarily fluctuate, given the current situation.”

“On the other hand -says García de la Puente-, we have to take into account that some product prices are suspended precisely because of this volatility to which we refer and which exists in the market today”. At the moment, there is no lack of supply, he assures. “But prices change hour by hour and minute by minute.”


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