36 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments
By the end of the 36th week, rates on the coasters freight market in the Azov region settled at a working level of about USD 21 per ton of wheat on the basis of the voyage from Rostov to Marmara. Compared to the week before, they gained an average of USD 1-2; grain prices that grew on the CPT and FOB basis among producers and Sellers kept the rates from further rise. At the same time, the contracts were mostly concluded on shipments in the first half or mid-September. There were announced no new contracts with shipments at the end of September; negotiations on them will begin on the 37th and 38th weeks.
Despite the fact that Buyers are doing their best to stand against price increases, this does not lead to a decline on the Azov market. It is worth mentioning that the rise in grain prices is a global trend, and prices in the Black Sea region only follow the indicators of the European and American markets. At some point, it might have seemed that Receivers would suspend purchases and try to delay negotiations in order to get a more attractive price. However, in fact, they are likely ready to accept price increase. Thus, Egypt, one of the main indicators of the grain market, has purchased though a small amount, but at a higher price.
Deep-water ports announced a hike in transshipment costs; it affects the grain price in the port along with grain elevators’ restrictions on the acceptance of grain trucks that exceed the permissible weight. In the current situation, subject to rising grain prices, working in spot, with small parcels, becomes the most attractive. In that scenario, the Azov ports have few competitors, if any.
The grain price has also increased on UA origin, while sunflower harvesting and rains in Ukraine a bit delay the delivery of cargo to ports. Charterers from Ukrainian ports have reported seasonal difficulties in the work: Producers are more involved in harvest than in negotiations and new sales. However, it cannot be said that there is no cargo at all in the ports. Rather, the available volumes do not allow the market to develop further.
In general, the rates in the Azov and Black Sea regions are likely to remain the same on the 37th week. There may be fluctuations of USD 1-2, as a reaction to the movements of commodity markets, but that is all. The level of rates on coasters for voyages to the Eastern and Central coasts of the Mediterranean Sea has not yet reached the psychological limit of USD 20; there are expected no significant changes compared to last week. This situation may last up to two weeks; it should change by the end of September.