Despite the tendency to decreasing, market participants predict a revival of freight growth in the near future. According to information from the Charterers, there is a high demand for feed stuff in Turkey. A large amount of shipments with such sort of grain can result in to increase the volume of exports to Republic, in spite of the tough economic situation in the country.
Another reason that may lead to increase of freight is the appearance of grain on the market from the intervention fund of the Russian Federation. The Government released for sale 1.5 million of wheat for further export. Thereby the authorities intend to reduce wheat prices in order to step up pace of exports through injection of grain into the domestic market. The demand for Russian-flagged tonnage is rising even more as Traders need to carry out the grain before river navigation will be closed.
For the same reason, nowadays the Owners of vessels without ice class are the most active on the market. As soon as ice restrictions come into force in the Azov basin (the end of November), the water area will become closed, which means that the number of available routes for voyages will be unapproachable for them. Thus, now they are trying to make more short-hauls and avoid long-distance voyages in order to ensure fleet turnover at current rates.
In consequence of water level fluctuation in the Azov basin (ports Azov, Rostov, Yeisk), some vessels weren’t able to depart the port owing to offshore water. Tonnage was forced to stand idle before water-level recovery (up to 3.8 – 4 meters), considering that the drafts of majority laden vessels more than 3 meters. As a result of this, delays of shipments and change of fleet schedule in the region were starting.
However offshore winds in the area of the Volga-Caspian Sea channel led to an increase in rates. Due to the water-level decline, the approach of ships to the port of Astrakhan was problematic. And moreover, the dry-cargo vessel with Iranian flag took the ground. Thus, tonnage couldn’t operate with full load, and a substantial part of the Owners reoriented to the deep-water ports of Caspian Sea (Aktau, Baku, Turkmenbashi). Even in spite of the fact that Astrakhan Charterers were willing to pay above the market in order to keep the contracts. This situation exacerbated a problem of the fleet shortage in the region, and pushed the freight up. Therefore, rates reached USD 60 pmt of barley basis Samara – Iran. This is 2 USD more than week 41.
In addition, Shipowners continue to move their tonnage from the Caspian basin. Also, strain on the market is created by USA sanctions against Iran, which will come into force on 5 November and will be directed to the shipping industry. Anticipating the difficulties on the freight market in the near future, caused by sanctions, many Charterers are trying to contract available fleet on consecutive voyages from Aktau and Astrakhan for a long time before restrictions begin to take effect.