The rush for tonnage on the 4th week on the Azov Sea market led to a significant increase in rates, the level reached a peak in the past two years. At the beginning of the week, Charterers were ready to pay USD 34-35 per ton of wheat on the basis of the voyage from Rostov to the Marmara Sea, with shipping dates in January. At the end of the week, the rates were at the level of USD 39-40 per ton. Such a notable rise is still explained by the duty and export quota introduced from mid-February. Considering the continued growth on the commodity market, receivers are forced to agree to prices and confirm deals but with smaller volumes, in anticipation of lower prices in the future.
Despite the sharp rise of the market, there are already prerequisites for disvolution. The fact that the confirmed volumes of purchases on TMO are significantly less than expected suggests the upcoming decline in market shipments. Rates of about USD 30 per ton of wheat on FOB basis from deep-water ports of the Black Sea already look not workable. This is also shown by the cancellation of the last GASC tender and the decrease in purchased volumes of TMO. Besides, it is worth noting that there are problems with the issuing of cargo documents in the Russian ports. Charterers are now leery of vessels opening on the 6th week and try not to confirm ships with late dates due to the high risk of getting trapped in processing of quotas and export duties.