There was an increase in demand for shipments with wheat and barley from the Azov region on week 27, the Charterers has been forming parcels of the new harvest. Over the past week, rates from the Azov basin increased by USD 1-3 for all destinations. The experience of last year showed freight market would grow until the winter. In this case, the key objective for Charterers to the height of the season will be to find available tonnage.
Nowadays workable freight level for voyage ex Rostov to Marmara reached USD 24 pmt on week 27. Ship Owners rely on the market will provide great opportunities for next few months, for this reason most of the contracts are concluded on the spot dates. The rates on remote destinations are rising faster than short-distance hauls, as Ship Owners try to work on a short leg within the Black Sea. Thus, they will be able to catch the moment at the market’s peak. At the same time, taking into account the growing freight level in Azov, Traders who have concluded long-distance contracts, have to pay extra to Ship Owners due to the extended fleet turnover.
Exporters who didn’t take vessels in time-charter before the start of the season are now trying to fix tonnage on consecutive voyages for distant dates (late July – early August) in order to conclude a contract at current rates. Such conventions are to be a guarantee for Traders that the goods will be transported on time, and they will not have to incur additional expenses owing to shortage of available tonnage.
There is a deficit of grain rail-way cars in southern Russia that is why it’s problematic to deliver goods to sea ports by rail. For this reason grain Traders, who usually prefer such transportation way, are considering alternative modes of transport, firstly water-borne. Therefore, market participants assume that in these conditions the Russian-flagged fleet will be in demand even more, and rates at the height of the season can hit record high.
In the Caspian region the freight market didn’t change over the past period. Market participants connect it with prolonged import embargo on wheat in Iran and the high demand for it in the Black Sea and the Mediterranean Sea regions, where freight level is higher. The freight basis of the Astrakhan – Iran kept the level of three last weeks and amounted USD 31 pmt. As expected, the situation can be changed by parcels of the new barley harvest, which began to form in Astrakhan and river ports. The Owners of vessels, traditionally worked only in the Caspian Sea, struggle with regular activity. This is related to not only a small number of goods for export, but also with financial sanctions against Iran. Thus, international trade with Iran is not intensive, consequently it can push freight downward.