|food outlook||No.2, June 2005|
|global information and early warning system on food and agriculture(GIEWS)|
Ocean freight rates
(Contributed by the International Grains Council)
Dry bulk freight rates have weakened in the period since March, with the Baltic Dry Index falling by 23 percent (to 16 May 2005). Nearly all of the fall occurred in the second half of April. China’s demand for minerals, recently the major driving force in the freight market, declined due to an increase in iron ore prices and the introduction of import quotas. Continuing port congestion in China and Australia due to a shortage in railway capacity, early-May holidays in Europe and Asia, surplus tonnage in the Pacific and weaker crude oil prices also contributed to lower rates.
In the Atlantic, Panamax rates were supported by active shipments of grain and oilseeds from South America. In March, tonnage in prompt positions was in short supply, especially in the US Gulf, and the major grain rate from the US Gulf to Japan increased by US$3.00 to US$63.00 per tonne. However, by the end of April, the rate had fallen to US$58.00 per tonne, following the relocation of some idle vessels from the Pacific. In early March, period Panamax rates from Europe to East Asia went up from US$43 000 to US$46 000 per day, but by the end of April they had dropped to US$38 000 daily. Period rates in the Pacific decreased to US$20 000 - 25 000 (US$40 000) daily due to a surplus of ships in the area and port delays.
Rates in the Capesize market declined in the Pacific, following a slowdown in China’s iron ore imports, which were affected by a new licence system, introduced on 1 March. In the Atlantic, however, reduced tonnage availability kept rates steady.
The Handysize market was under downward pressure from other sectors, with the exception of Handymax rates from the US Gulf, which remained strong. The grain rate from Brazil to the EU (Antwerp-Hamburg) fell to US$49.50 per tonne by early May, from US$58.50 in March.