The Azov freight market showed signs of revival during the reporting week. Firstly, the number of spot vessels in the region has seriously decreased, which allowed Owners to take a break and try to raise rates for the next voyages. Secondly, the 9th week in Russia is shortened due to the celebration of Soviet Army and Navy Day: many Charterers decided to provide themselves with tonnage in advance; so the relatively high demand led to an increase in rates.
The results of the last Turkish tender, which were announced past week, had evoked widespread reaction. Players received a clear signal to reduce the price of grain, and after that, the number of cargo offers on the market has increased significantly. At the same time, Traders think that the price will continue to fall in the spring; therefore many sell autumn ‘futures’ at a price USD 2-4 lower than the current one.
The main trend of the Gulfood 2020 exhibition held in Dubai was a significant reduction in the price of wheat flour on foreign markets. According to experts, this chain reaction will also hit the price of wheat in the new grain season. At the same time, many flour millers will cut down expenses in all possible ways in order to reduce the cost of raw materials, and the main method for this is to increase the size of parcels of goods. This may affect the Azov coaster market in a negative way, since the main buyer and processor of Russian wheat is Turkey, where the goods are delivered in 3-5K parcels.
There is observed a growing trend on the Caspian market, which is caused not only by the forthcoming Novruz Bayram, but also by the increasing offer of fertilizers from Turkmenistan. Shipments from Bekdash to Baku (with further transportation to the Black Sea coast) are gradually turning into an independent cargo traffic that will soon be able to compete with grain shipments to Iran. The efficient speed of cargo handling and short transit time allow Owners to achieve high fleet turnover, and rising rates make these voyages more appealing. Market insiders think that this cargo flow may attract more tonnage from the Black Sea after the navigation open.