38 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments
The Azov region is experiencing a period of freight increasing. Over the past week, rates from the Azov basin and Russian river had risen by USD 3 for all destinations of Black and Mediterranean Sea. Nowadays workable freight rate for voyage ex Rostov to Marmara reached USD 30 pmt of wheat on week 38. This is 3 USD more than level of previous time.
Market participants find the reason of such a dynamic in fleet deficit as nowadays essential number of vessels is not able to carry grain cargo from ports of the Azov Sea. In the context of frequent complaints about unsatisfactory grain quality on the part of top importing countries (Egypt, Indonesia, Sudan and Israel), the Federal Service for Veterinary and Phytosanitary Surveillance tightened requirements for wheat exported from Russia. The additional researches for excluding infected grain and procedure of complete (not prophylactic) fumigation were introduced last week. The analysis of wheat take from 5 to 14 days, and the vessels will not be dispatched without such documents.
The complex fumigation, in contrast with prophylactic, involves the processing of the whole ship, not only a hold with grain. Not all ships have relevant technical features for complex fumigation of grain with crew aboard. And members of crew have to leave the ship for several days, resulting in extra costs. Therefore, the number of suitable tonnage that can export the grain according new rules has significantly reduced. This procedure led to increasing rates on voyages with convenient vessels. And, on the contrary, the freight has considerably fallen on hauls by vessels which are not adapted for full fumigation.
Owners of the tonnage, who are unable to transport grain due to new requirements, focused on coal and scrap shipments. The Charterers consider that a growth in fleet supply can provoke a fall in rates for transportation of these commodities in the near future.
There is a period of stability in the Caspian basin. The corn of new harvest has not yet arrived at elevators, and the Traders keep the barley in anticipation of rising export prices, which is forecasted due to a poor yield. Thus, the balance of the freight market is supported by a small supply of fleet and cargo in the region. Therefore, the rates amounted USD 55 pmt of barley basis Samara – Iran, which is equivalent of level week 37.