8 week: Russian River, Azov Sea, Caspian Sea; Coaster shipments
Buyers in the region are not going to pay an even higher price in procurement of grains. In the context of growing global grain prices and the introduction of export duties in the Russian Federation, the FOB price is rising: shippers and Traders are trying to include new costs in the price in every possible way. In a situation where prices are already at a fairly high level compared to the same period of previous years, and a significant part of the raw materials is supplied through state tenders, importers do not agree with the sellers’ offers, so they announce the purchase price lower. Of course, this this affects the freight market in the Azov region in Russia. If it was be possible to talk about the rates of about USD 30 per ton of corn from Azov to Marmara, then at the beginning of March the working level is already USD 26-27 per ton for a similar voyage. It should be noted that some Owners are still waiting for the next surge of demand for tonnage on the brink of the last deadline on March 15; they offer the rates above USD 30. The spot fleet with opening dates for the first half of March is fixed at the level of the high 20s.
The Black Sea coasters market will have a similar downward trend in rates. Currently the level of freight for voyages from Ukrainian deep-water ports is quite high; the rate from Kherson to Marmara is just above USD 20. Some Charterers see the working rate for the end of March/April at the level of USD 16-17, explaining this by the high purchase prices from the side of shippers, as well as decrease of prices from the side of importers. Much depends on the balance of power on the commodity market: whether importers will keep a high pace of purchases, or try to “hold out” for the new grain season. In case of a decrease in the grain exports volume from Russia by coasters by reason of high duties, then alternative supplier countries will certainly be a priority, and the demand for tonnage from deep-water ports will be kept. On the other hand, a significant part of Russian grain has already been exported: the volume of exports for January-February is much higher than last year, and importers have a certain margin for trying to get a new favorable price. This will undoubtedly affect the freight rates, and the market will face a decrease in the amount of cargo sold and ready for shipment.