Participants of the freight and commodity markets are trying to deal with the consequences of the introduction of quota and export duties. On the Azov market, as expected, shippers are in hurry to ship goods before March 15. Undoubtedly, in the context of the continuing decline in freight rates, long-distance voyages are becoming interesting for Owners. In this regard, bidding on the rates has become fiercer: Charterers are aiming at the level of the average 30s for the voyage to Mersin/Iskenderun; Owners of vessels opening before March 12 are trying to get the low 40s for such a voyage. Judging by experience of working in the conditions of deadline, the demand for tonnage on specific dates does not allow the rates to fall much. It is also worth noting that most Owners of the Russian-flagged fleet already consider work in transit as a priority, so they are actively looking for such cargoes. Therefore, part of vessels will leave the Azov market, which should prevent the formation of tonnage oversupply.
In view of the news about state project of price regulation for fertilizers in Russia for the sowing campaign this spring, rise in the export of this cargo is possible. Grain producers are speaking of increase in fertilizer prices from 20 to 70 percent this year. Considering the growing cost of production, fertilizer producers will likely try to find alternative distribution area.
On the brink of the grain season’s end, it is safe to say that the exporting countries are fighting for buyers. As a result, key grain importers from the Black Sea countries and France, such as Egypt, Algeria, and Saudi Arabia, find it more profitable to purchase North American wheat with shipping dates for April / May. The reason is the increase in FOB prices for shippers and suppliers, who adjust prices with reference to the duty in Russia. Therefore, barley is mainly been exported, as far as the duty for this cargo is lower, and there is more space to negotiate the price. The situation should be clarified after the Algerian tender, which will be held on March 9. But now the rates for tonnage from deep-water ports are high, due to great demand. For voyages from the Black Sea to Egypt, Owners want to get more than USD 20 per ton of corn, for a handy-size vessel.