On the 23rd week, freight rates in the Azov region fell to a minimum; they are on the verge of economic reasonableness of voyage performing. On the basis of voyages from Azov ports to the Turkish Black Sea coast, a ton of cargo could be shipped for USD 10, in some cases even for USD 8. For some Owners, with figures like that, the economics does not always break even, considering the cost of the voyage. But even at such low rates, it is not possible to fix due to the fact that a significant number of tonnage is open in spot. The situation will not change within the foreseeable future: the old crop residues volume is extremely low; amid the sufficiently strengthened ruble, poor business activity of domestic sellers is quite understandable.
However, market insiders are actively discussing new crop grain prices, which have been steadily rising since the beginning of June. At the end of the reporting week, prices for the new crop wheat with a protein content of 12.5% and delivery to Novorossiysk on FOB basis in July fluctuated at the level of USD 198-202 per ton. In the middle of the week, Ukrainian wheat has being traded at USD 202 per ton, and Russian one at USD 204 per ton; by the end of the week, prices rose by another USD 2.
At the very beginning of June, the results of the GASC tender were announced: Egypt purchased 120 thousand tons of common Ukrainian wheat at the price of USD 210 per ton with delivery10-25 July from the ports of Nikolaev and Odessa on FOB basis. Amid positive forecasts about the harvest volume in Ukraine, grain from this country turned out to be the most competitive in comparison with offers from France and Russia. Despite the fact that a preference was expressed for bids no higher than USD 210, French grain continued to grow in price, which pulled the market up in other supplying countries as well.
The ongoing stability of the Caspian market looks almost positive as compared with neighboring regions. During the reporting week, freight rate on the basis of the voyage from Astrakhan to Iran was at the level of USD 20 per ton, which is twice as much as the rate for a comparable voyage from Rostov to Marmara. The only noticeable source of demand for tonnage remains the cargo traffic of Turkmen fertilizers, which is currently the main opportunity to make a profitable voyage for Russian-flagged vessels.