Freight rates in the Azov region continue to reduce, but the pace of market decline has slowed. Unfortunately for Owners, this is more due to the approach of rates to the voyage self-costs, rather than serious changes in the state of grain market. According to the data from Traders, the price of domestic grain reduced slightly at the end of last week, but at the same time, the dollar went down too. These two factors compensated for each other, and the overall situation has not changed: there is still a lot of available (low-cost) spot tonnage.
Expectations that freight rates will grow rapidly after the Turkish holidays have not been met. The market continues to fall both in the Azov region and in the Black Sea. Rates from Rostov to Marmara with wheat are on average USD 17 per ton. As a comparison, rates fluctuated at USD 28 for the same voyages in 2018.
To maintaining of prices on the domestic market, the Turkish Grain Board announced a new tender for the purchase of 250,000 tons of soft milling wheat for delivery in mid-September. Most likely, market insiders will wait for the results of this tender to determine trends in the movement of grain prices. The tender outcome should be known on September the 3rd, and this may become a pivot point for increased activity in the region.
The freight market in the Caspian Sea supported the overall southern trend of decline. In addition to the traditional regional difficulties caused by sanctions, the volume of cargo offers from the Caspian Sea ports (Makhachkala and Aktau) decreased sharply during the reporting week. Producers in the Northern Volga region have not yet completed harvesting, which does not add positive to the market. Open spot tonnage already begins to accumulate at Astrakhan.