Freight rates on major grain shipping routes recovered from the previous weakening trend by the end of March, only to decline again through to late May (Table A.12). The Baltic Freight Index (BFI) stood at 1 401 on 21 May, compared with 1 454 a month earlier. Record export (f.o.b.) quotations encouraged importers to delay purchases as long as possible, and to enter the market on any temporary dip in prices. Consequently, charterers tended to book freight needs at the same time, accounting for the occasional rallies in rates.
Nonetheless, periods of intense activity could not disguise the excess tonnage available in the dry cargo sector. Older vessels continued to seek cargoes as scrapping interest remained subdued. A large number of new ships are due to enter service in the next few months, especially in the Panamex sector.
Rates on routes from major grain exporters to importing developing countries were, in several instances, significantly lower than a year ago. However, such financial advantage was more than offset by higher export prices. Tight supplies of grain on the world market and the withdrawal of export subsidies, have caused a sharp rise in import costs for grain.