23 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments

23 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments

The 23rd week saw XX International grain round in Gelendzhik where the participants discussed the current trends of the grain market at the forefront of the new season. In connection therewith, as well as due to Muslim holidays, there was no activity in the market. The abundance of tonnage supply is expected in the Azov region at 24-25th weeks, but since the freight market for Owners is already on the fringes of profitability. If the rates reduce, then the decrease will be minimal, despite the expected increase in the spot tonnage supply.

The low activity in the region stems also from the fact that producers almost run out of carry-overs compared to a year earlier, and those who have them prefer to hold back the grain amid rumors of high demand in the new season due to crop failure in the USA. This is confirmed by the fact that sales on FOB basis ex Kavkaz roads also stopped because the proposed price is unacceptable for the sellers.

According to the data of Exporters, the new crop barley will be harvested in the coming weeks, and it will arrive to ports in early July. An increase in cargo offer could be a pivot point for freight rates surge in the Azov Sea. Most likely, spot shipments offers will appear on the market at the end of the month, and until that time, positive dynamics is not expected.

The volume of high-grade durum wheat of Russian origin can significantly increase in the new grain season, which should notionally mean more shipment contracts to the EU, where this product is most in demand. This may affect the swift growth of freight rates for voyages to the Mediterranean Sea and the Adriatic Sea.

Freight rates to Iran stopped their reducing and even increased a little during the reporting week. The key reason for this was the delay of vessels on discharge due to holidays, as well as the fact that many Owners preferred to move their fleet from the Caspian region behind of a sharp decrease in rates during the past weeks. As a result, there appeared a trend for the fleet deficit, which did not allow the rates to reduce.