38 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments
The new week on the freight market of the Azov-Black Sea region began with a decline. The rate for a 3k parcel of wheat from the Azov Sea to the Marmara Sea fell to USD 42 per ton. Though, this drop turned out to be quite fleeting, as by the middle of the week, rates had increased back to the level of USD 44 per ton. Now there are many open vessels on the market; however, Owners are in no hurry to show their fleet, as they are waiting for spot dates to start working any cargo. The gap in the rates level between Owners and Charterers is now pretty large, so the number of fixtures concluded this week is quite small. Owners are trying to keep the market at the level of USD 46 per ton of wheat to the Marmara Sea, while Charterers believe that the freight market has already dropped to the level of USD 40. Next week it will be clear who will win over the market.
Meantime, a lot of corn will be loaded from the Black Sea ports, and market here will definitely not decrease in near future.
The grain season in Brazil is already over, almost all export quantity of corn and soya was shipped. Brazilian soybean farmers store their crops rather than sell them because they expect prices to rise further as global stocks decline, according to brokers, buyers and sellers of the world’s largest producer and exporter of soybeans. Another reason for the accumulation of crops is fears that the La Niña weather event could limit the next harvest in South America, farmers and brokers said. They also cite an escalation of domestic political tensions that could weaken the country’s currency over the next few months. Farmers hope to force exporters and local processing industries to pay more.
Nowadays, it seems safer to have grain on hand than currency. As one of biggest Charterers said: our last Handymax is under discharging in Central Med, and we will make shipments with soya bean meal for next month.
Chinese government has effectively banned phosphate exports through June ’22. China accounts for almost 30% of world trade. This is bad for global phosphate prices and even worse for those highly dependent on those tons players like Australia. Since most of the market volumes will spread across the other countries-receivers, competition between Traders will increase and the first reaction of the market is the expectation of a decrease in freight in order to catch the lost volumes. However, it is also a good possibility for business to conquer new clients: in the nearest future market can see the new unusual destinations for phosphates. Experts fear that urea will face the similar action from China in nearest future.