29 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments
On the 29th week, the Azov region freight market reacted sharply to changes on the commodity market. Grain increased in price, as far as a significant amount of it was shipped from deep-water ports, where the purchase price is commonly higher. As a result, the sales volume from the Azov ports has decreased, and there are almost no cargo offers with laycan starting from the 31st week; those that appear are being fixed at a moment’s notice. The average rate on the basis of the voyage from Rostov to Samsun fell to USD 15 per ton. It is too early to talk about a stable decreasing trend; rates rather will remain at the current level on the 30th and 31st weeks, with fluctuations in both directions of about a US dollar.
On the domestic market, the price of wheat was pushed up also by lowered yield forecasts. In the Stavropol territory, it is still estimated at 18% less than last year’s level, in the Krasnodar region at 24%, in the Rostov region at 2%. The situation is expected to gradually straighten out after the rate of harvesting increases in the Central regions of Russia and the Volga region.
Rates from river ports, oppositely, are not yet reduced. This may be explained by the number of factors; however, the main reason is the water level in the lower reaches of the Don River, which makes it possible to work normally only for the Omskiy type vessels. The latter are also in high demand for performing of transit voyages. Rates from river ports remained almost at the same level, but below Owners’ ideas by USD 7-8. Thus, Charterers are ready to discuss a rate of USD 32-33 per ton on the basis of the voyage from Balakovo to Samsun, and Owners want to fix at the level of at least USD 40. This is explained by the fact that at the beginning of negotiations on shipments, some Charterers have showed high rates, and then, due to the real economy, they could not sell them. However, they formed the idea of possibility to find the cargo for that kind of money.
Rains in the Black Sea region hamper the harvesting, and there is not much cargo from Ukraine on the market. Grain is mainly shipped by large companies, and it is difficult for small players to compete with them. The latter ship niche goods foremost, sunflower seed meal, wheat bran and derived products. As a result, the growth of rates from Ukraine has stopped; it is kept at the level just above USD 10 per ton on the basis of the voyage from Kherson to Marmara, and to the Adriatic or Eastern Mediterranean it is a little below USD 20.
In the Central regions of Russia, harvesting is well under way, and the new crop grain is already appearing on the market. In the near future, this should have a favorable impact on the Caspian market, where freight rates are still on the verge of profitability. The first to enter the market will be barley, the price of which is quite high in the Caspian region and is more interesting for sellers than in the Azov region. The Caspian market is expected to start grow in the next two weeks.