25 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments
On the 25th week, the situation on the coasters market in the Azov and Black seas region remained difficult. Market insiders expect that from July 1, restrictions on the export of main types of Russian grain crops will be lifted. Amid these expectations, a number of cargo offers for the first half of July appeared on the market. Traders are seeking options for shipping the first parcels of the new crop barley, which is being harvested in full swing in the Crimea, Krasnodar and Stavropol territories. Charterers with already signed contracts are trying to fix vessels as early as possible, taking advantage of the low market. Owners, in their turn, use the tactics of rates overshooting on July, trying to return the market to the level of voyages profitability in the quickest possible time. The balance has not yet been found, and so far, there are not many deals for July. For now, the market rather remains on the side of Charterers.
There is widely discussed the problem of issuing documents for a number of cereals that are nominally available for shipment since the beginning of July. Market insiders think that the Federal Service for Veterinary and Phytosanitary Surveillance officers have an unspoken order not to issue quarantine and, as a result, phytosanitary certificates before obtaining clarification from the Ministry of Agriculture. This may slow the rates growth in early July. Exporters who have faced a similar problem with the ban on sunflower exports in March will not enter into new contracts until the situation is clarified officially.
Market insiders also agree that the Ministry of Agriculture is likely to extend the ban on sunflower exports until the end of August to stimulate the domestic processing industry. Despite the negative reaction of the market to these intentions, prices for both sunflower oil and sunflower seeds have grown significantly. If the restrictions will be lifted, this crop may be in strong demand on foreign markets. For now, Owners may only hope for removing of the export quota for the main types of grain, such as barley and wheat.
The Caspian freight market is still in stagnation, meeting the same fate as the Azov Sea one. Everyone is waiting for the beginning of July, when the new crop of barley will appear on the market; it is already actively being traded. So far, the market insiders agree on the forecast that freight rates in the Caspian region will grow faster than the rates from Azov Sea ports, which is explained by the high demand for barley from Iran.