Grains export push to boost dry bulk shipping market

Taylor Maritime

23/02/2023 10:56

By Jonathan Saul
       LONDON, Feb 23 (Reuters) - Bumper soybean harvests in
Brazil and unsold grains stocks in the United States are set to
boost dry bulk shipping rates as buyers including China restock
after supply shocks last year, leading freight operators said.
    The dry bulk shipping market has been hit in recent months
by slow activity, partly driven by the COVID lockdowns in China,
one of the world’s biggest generators of seaborne commodities
trade including grains as well as coal and iron ore.
    Grains supplies were also affected by the war in Ukraine for
part of last year until a United Nations-backed corridor was set
up, although exports have slowed of late.
    Shipping participants say they are already seeing early
freight chartering ahead of the start of the South American
export season and expect that to gather pace from April.
    Grains account for 50% of cargo carried by London-listed
Taylor Maritime Investments, which is already seeing more trade
from the U.S. Gulf.  
    "We did see cargoes coming out of Mississippi a month in
advance, which we would not normally expect to see," its chief
executive Edward Buttery told Reuters.
    "I’m not expecting a massive recovery in rates this year,
but I am expecting a good recovery."    
    Limited dry bulk ship ordering and scrapping of smaller
ageing vessels, especially used in grains trade, and less energy
efficient are also expected to tighten vessel availability this
year. 
    "China’s grain stock levels are relatively low, so it’s not
just the supply side of the equation but the demand is there,"
said Jan Dieleman, president of Cargill's ocean transportation
division.
    "We are seeing quite interesting movement coming ahead of
us."
    New maritime environmental regulations introduced in 2023
are also expected to mean ships slow down speeds to cut 
emissions, further reducing vessel availability.
    "The reshuffle of trade routes is already taking place and
other exporting nations filling the gap of the lost Ukrainian
supply," Star Bulk Carriers CEO Petros Pappas told a Feb. 17
earnings call.  
    "Furthermore, a record high Brazilian soybean crop is
currently harvested while the recovery of the Chinese economy
should substantially increase the (soybeans) demand."
 (Reporting by Jonathan Saul; Editing by Emelia
Sithole-Matarise)
 ((jonathan.saul@thomsonreuters.com; + 44 207 542 4357 ; Reuters
Messaging: jonathan.saul.thomsonreuters.com@reuters.net))