Ukrainian sellers are aiming to redirect their wheat exports to Asia and Africa following the reintroduction of import duties and quotas on Ukraine’s agricultural products to the EU from June 6.
The wheat quota was set at 1.3 million mt, with tariffs of Eur95/mt ($111/mt) for additional imports. Traders said that while the EU imported 4.5 million mt of Ukrainian wheat in the 2024-25 marketing year, with Spain its largest buyer purchasing over 2 million mt, the imposition of the tariffs could undermine Ukraine’s competitiveness, creating uncertainty around the volume of future purchases in the marketing year from July 2025 to June 2026.
One seller pointed out that a quota of 1.3 million mt is merely “two to three months of supply” and Ukrainian wheat may struggle to remain competitive in the EU. “Why would we need to reduce the cost of the wheat? We would need to sell to other countries that will pay more at a fair price, like Asia,” the seller added.
A second seller echoed similar sentiments, with most of their business traditionally going to the EU, but now seeing an increasing push to redirect exports to Asia and Africa.
A third local source said: “We need to be careful with shipments to be in line with the quotas to avoid extra charges.”
With the quota likely to be exhausted quickly, “Ukraine will have no choice but to market elsewhere heavily,” a fourth seller said.
As Ukraine aims for these markets, there is an acknowledgement, particularly for export to Africa, of the competitiveness of milling wheat exported from Russia to similar destinations, such as Egypt and Turkey.
“Everyone is looking for alternative markets, but it is already clear that there will be strong competition with Russia on these markets,” another seller said.
Platts, part of S&P Global Commodity Insights, assessed the Milling Wheat Marker at $227/mt, up 50 cents week over week, while Ukraine 11.5% was assessed up $2/mt at $221/mt for August loadings. The CIF Marmara 12.5% Turkey coaster market was assessed up $1/mt at $231.
Asia, notably Southeast Asia, has capitalized on competitive Ukrainian feed and milling wheat offers in recent years, particularly during a 31.5% year over year slump in Australian wheat production during the 2023-24 marketing year (October to September). As a bloc, Southeast Asian countries took 12.4% and 18.6% of Ukrainian deep-sea port exports in the 2023-24 and 2024-25 marketing years (July to June), respectively, led by Indonesia, according to lineup data from market sources.
However, Indonesia’s recent memorandum of understanding, signed July 7 with US Wheat Associates, commits to double its purchases of US wheat for the next five years. This may soon prove to be a hurdle for Ukrainian wheat sellers looking to redirect flows to one of the world’s largest wheat importers. While the additional imports of US wheat would likely go toward substitution of soft and hard wheat demand, typically purchased from Australia and Canada, in existing milling formulations, a Jakarta-based miller had noted that they could increase their usage of US milling wheat at the expense of Black Sea supplies if the former became significantly cheaper under the new MOU. According to the Canadian Grain Commission, Indonesia imported 1.94 million mt of Canadian wheat for the current crop year to date (August 2024-May 2025).
Also, while scrutiny of the unrest around the Black Sea and Middle East has declined in recent days, with the spotlight firmly back on tariff negotiations between the US and its trading partners, the risk of freight delays and cost spikes continue to lurk in the background, which may drive some Asian buyers to regions with less risky shipment routes such as Australia or Canada.
Meanwhile, market sources say downstream demand concerns may very well continue to dictate wheat flows and prices into Asia. Milling industry sources in Japan, South Korea, Indonesia and Malaysia have continued to highlight slow consumption trends in their countries, with the bearish sentiment persisting, particularly amid expectations of bigger crops from the EU and the Black Sea, alongside Australia’s big carryout and China’s continued absence from the international market. These will only exacerbate the hand-to-mouth buying pattern in Asia, particularly Southeast Asia.
Platts assessed FOB Australia APW and ASW wheat up $2/mt to $257/mt and $251/mt week over week. CWRS FOB Vancouver was assessed down $4/mt at $278.80/mt for 30-45 days forward loading.
Source: Platts
