Food Outlook No.5 - December 2002 p.10

Previous pageTable Of ContentsNext page

Ocean Freight Rates

(Contributed by the International Grains Council)

Please note that the previous report on Ocean Freight Rates in the Food Outlook No. 4, October 2002 issue contained errors in several of the quoted freight rates, which were mistakenly introduced by the editors into the International Grain Council's original contribution. These errors have been corrected in the version of the document, which is available in the GIEWS publications archive accessible on the Internet as part of the FAO World Wide Web ( the following URL address:


The dry bulk freight market remained firm during the past two months with the main support coming from grain business in the Atlantic, mineral trade in the Pacific and high bunker fuel prices. However, the large number of newly built ships entering service continued to pressure the market. The Baltic Dry Index (BDI), the main market indicator, advanced by 234 points from 1 255 in late September to 1 489 by the end of November.

The 21-nation Asia Pacific Economic Cooperation group supported a significant tightening of maritime security measures in the regions to reach a common high standard and in particular address the issue of maritime terrorism. Measures will include automatic identification systems, electronic customs reporting and better cooperation on piracy issues.


Atlantic Panamax rates were strong, despite weaker bunker fuel prices. The major grain rate from the US Gulf to Japan remained close to US$24.60 per tonne. The rate for modern ships from the US Gulf to the Chinese Taipei was recorded at a higher level of US$23.60. China's decision to allow imports of GM soyabeans for a further nine months contributed to the nearby bullish sentiment. Active trading from South America also supported the market, a grains cargo was reported from the River Plate to Iran at a higher rate of US$29.75.

Owners gave preference to timecharter rather than voyage contracts, to minimise the risk of higher bunker fuel prices. Atlantic Panamax timecharter rates climbed above US$10 000 daily, with some above the US$11 000 level, suggesting that the market could remain strong well into the first quarter of 2003.

The Pacific Panamax sector was stronger on coal shipments from Indonesia and Australia to Europe, but rates were still quoted at a considerable discount to the Atlantic, and it is thought that the gap would widen if the coal trade slowed down. A grains cargo was fixed from the Pacific North West to Chinese Taipei at US$13.25.

In October, a management lockout of union longshoremen at 29 US West Coast ports delayed grain and soyabean meal shipments to Asia. Almost 200 ships sat idle along the US West Coast. Shipments have resumed in November, but at slow pace, following US government intervention. Labour disputes also affected the Canadian Pacific port of Prince Rupert.

Single voyage grain business included a cargo from Brazil to the EU (Antwerp-Hamburg range) at US$17.75, a vessel from the US Gulf to Algeria at US$18.75 and a wheat cargo fixed from Pakistan to Peru at US$22.50. A rare shipment of French wheat to the US was reported, but chartering details were not available.

The Handysize market remained firm, supported by high bunker prices and active trading from South America, the Black Sea and Continental Europe. Substantial gains were reported due to increased interest from timecharter operators, suggesting a longer-term positive trend. Super Handymax vessels (40 000-45 000 tonnes) were especially in demand on the routes from Continental Europe to the Far East: owners could get up to US$15 000 daily.

From South America, recent deals included an HSS vessel from Brazil to the EU (Antwerp-Hamburg range) at US$17.50 and a cargo of agriproducts from Argentina's Upriver ports to Jordan at US$32.00.

Ukraine and the Russian Federation have been trying to ship as much grain as possible before the planned introduction of new EU import arrangements in January. Total Ukrainian and the Russian Federation grain shipments from Ukrainian ports in November are estimated at 1.45 million tonnes. Rates for smaller ships from the Black Sea to Italy and Spain are reported at US$30-32. New Ukrainian wheat sales were reported to Peru, Bolivia and Chile, but chartering details were not available.

Elsewhere, Handymaxes on the routes from US Gulf - Mediterranean and Continent moved up to the US$11 500-12 000 level. Handysize rates in the Pacific were at US$8 500-9 000, while for trips from India to China they have increased to US$10 000. Rates from the US Gulf to Algeria were slightly higher at US$21.75. A cargo of Chinese maize was loaded for Chinese Taipei after the temporary lifting of a long-standing ban on imports from the mainland.

Previous pageTable Of ContentsNext page