After the holidays, the business activity of Turkish Importers is still at a low level. The number of concluded deals with the Turkish side has significantly decreased, and this situation probably will not change in the near future. Recently, the Turkish Grain Board announsed the grain intervention in the domestic market in order to stop the price inflation on food.
According to the resolution, 2 million tons of wheat should be sold from the goverment reserves, including 100 thousand tons of imported grain this year. It means that Turkish buyers are unneedful of Russian wheat, while declared volume of domestic wheat will not be realized.
Russian Traders have reoriented sales to Europe, North Africa, Lebanon and Israel due grain resolution of Turkish government. In addition, there is a decrease in demand for scrap on the Turkish market, consequently rates at such hauls are dropping. Thus, freight market in Azov showed a tendency to falling on week 34. The rates reached USD 23 pmt of wheat basis Rostov – Marmara. This is USD 2 less than the level of previous week.
There are a lot of requests from Charterers of sunflower seed meal and sweet beet pulp in the market of the Azov and Black Sea regions. Traders are looking for available tonnage for shipments of cargo to Morocco, Italy and Spain, Greece and Cyprus. Traditionally, the export season for these goods starts in the beginning of September.
The situation develops differently on the Caspian freight market. In the mid-August the United States has launched a program to limit Iran’s foreign economic relations, which should be completed before November 2018. The main impact was inflicted on the Central Bank of the Islamic Republic; as a result, money transactions involving the US dollars either are blocked or need more time due to additional checks. Market participants have already noted the faulty operations of bank and some troubles in making of payments. In this context, some Traders discontinued their activities in the region pending economic problems in the Republic. However, despite of this, freight rates stay at the same level on the Caspian basin. There is still a balance between the quantity of available fleet and the cargo supply on the market. Thus, the freight rates amounted USD 28 pmt of barley basis Astrakhan – Iran.
According to information of Agriculture Ministry, the farmers started corn harvesting in the Krasnodar territory, Saratov region and Tatarstan. The equilibrium of freight market may be disrupted when the parcels with new crop will occur in the region. This circumstance can lead to revival of the market and growth of freight rates in the Caspian area, where corn is the main exported grain.