Last week, freight rates in the Azov Sea continued to rise. The rate for 3k parcel of wheat from Azov to the Marmara Sea reached USD 53 per ton. Wheat export prices are at their highest since 2016. Thus, the cost of a ton of Russian wheat with 12.5 percent protein content and delivery date for the end of November increased to USD 330-335 within a week’s time. Along with price rise, freight rates are also growing. The export duty for the period from November 17 to 23 will increase from current USD 69.9 to USD 77.1 per ton. Even such a rise in the duty does not reduce the amount of cargo offer on the market. The lack of open tonnage forces Charterers to fix completely on Owners’ terms. At the moment, only a decrease in cargo offer may to stop the growth of the freight market, but it is not expected until the end of November.
Charterers of the Black Sea market have partly achieved their goal of reducing the freight in the region. Since the beginning of 45th week, Owners have gradually started to reduce their rates in response to the boycott. Despite this, Owners still feel comfortable with current prices, as they advised that groundwork has been done in recent months, which still makes them say that this is the Owners’ market. This situation brings kind of tranquility to the market for upcoming weeks, as Charterers look positive for the boycott results, and Owners are quite happy with same. For example, Handies to Tunisia with grains two weeks ago was quoted on the level of USD 51-53, and now it is USD 44-45, but Charterers still not fighting for such rates.
But market’s activity is still very low, and Charterers fix most of the parcels private and confidential. So we expect Charterers to continue the game until the end of the month.