The GASC tender for the purchase of wheat held on the reporting week created a mixed picture on the commodity market both in the Russian Federation and in the exports direction. Throughout the week, the freight rate on the basis of voyage from Rostov to Marmara was traded between USD 25 and 29 per ton of wheat from the side of Charterers and Owners respectively. At the beginning of the week, many Traders have faced the situation when Turkish buyers were trying to demonstrate a decrease in demand for wheat and reduced purchase prices. Producers, in their turn, saw no reason to lower prices, especially in the Central regions. After holding and announcing of the results of the GASC tender, Turkey became more active in negotiations and procurement. Not all Traders though can work in conditions of sharp fluctuations in purchase prices and freight rates. In order to confirm desired by Owners rates, the purchase of goods has had to take place on the 43th-44rd weeks: now producers see the prospect of purchasing large volumes, so they are not in a hurry to reduce prices.
Despite the fact that weather conditions gave extra time for Owners to stand on their ideas, there appeared significantly more opening tonnage on the market by the end of the week. In general, the Azov region remained at the same positions on rates, but a decline, albeit temporary, looks unavoidable in the short-run. The market may be saved from a sharp drop by demand for tonnage for sunflower seeds export on spot dates. On the 46th week, there will be made a decision on measures to restrict the export of sunflower seeds, the main initiator of which is the Oilseed Union. The reason for taking this action is that production on the domestic market is only 70% loaded due to the lack of raw materials. In the period before the decision comes into force, a noticeable demand for the fleet should be expected, as importers steadily show increased interest in purchasing raw materials.
For a few weeks, the freight market in the Southern regions has been in a very unstable state, which prevents participants from responding to changes in a timely manner and from planning long-term work. The main factor is the global issue of export restrictions and their concentration in the hands of key market participants. Since the dynamics of price growth on the domestic market and the desire to “hold” goods to the best prices run counter to the plans of exporters, freight volatility will continue at least until the end of 2020.