During week 42, freight rates showed expected, albeit moderate growth. The prospects for further market recovery, which owners count on, are unlikely to be clear until weeks 43-44. The matter is that traders are waiting for the results of the next Turkish tender with shipment dates for the first half of November, which is to be published on October 22. Until then, no cargo offers with laycan at the beginning of November would be expected: on these dates, only those parcels of grain, which were already delivered to ports and have not been shipped in October will be in work.
At the moment, the rate level is about $20 per ton of wheat on the Rostov to Marmara basis. At the same time, charterers are ready to pay $1-2 more for spot tonnage, Glogos Project reports.
Wheat from river is still mostly shipped to the Kavkaz roads transshipment. There are much fewer direct export voyages compared to the previous season, despite the fact that freight from the Volga elevators to the Black Sea exceeds the figures for the same period in 2019 by an average of $5 per ton.
Besides, the work of traders is complicated by the procedure for commodity market formation: updating prices and rates takes two to three weeks on the average (in accordance with the TMO tenders, which have recently been held more often and for small parcels); this is comparable to the transit time of a voyage from river ports to Turkey.
Amid the news about the drought in Argentina and Australia, grain prices on commodity exchanges in the USA and Europe are showing dynamic growth. The price of 12.5% wheat on FOB basis from the Black Sea ports is also steadily rising. Producers are in no hurry to sell grain remaining in November and December; they hope that demand will only increase amid dry weather forecasts and disturbing rumors about the food security policy in the face of the pandemic. A high stable demand for goods is already being formed in the Black Sea region domestic markets; therefore producers have an alternative for export. For the Azov freight market, this means a smooth growth in rates by $1-2 per week.
According to Glogos Project, on week 42, freight rates for 3,000-5,000 dwt vessels for wheat parcels to the Sea of Marmara made $20 pmt from Rostov and Azov, $19 pmt from Yeisk and Taganrog, and $18 from Temryuk.
Freight rates for coal to the Sea of Marmara made $19 pmt from Rostov and Azov, $18 pmt from Yeisk and Taganrog, and $17 from Temryuk.
Freight rates in the Caspian grew by $1 pmt.
Freight rates for 3,000 dwt vessels for barley to Iran made $23 pmt from Astrakhan, $19 from Aktau and $20 pmt from Makhachkala.
Please note that the rates cited in this article are average market rates. We ask our readers to pay attention that this information is not a commercial offer and cannot be an example for comparison in commercial disputes and arbitration.