The last week saw freight rates stop declining in the Azov and Caspian regions. And for the first time in 2.5 months rates hold the course for increase week 22 that is unusual for the low grain season.
There is growing demand for Russian barley from the Iranian side, which contributes to rates increase from the Middle Volga ports where still there are fair volumes of grains. Thus, workable freight level for voyage ex Samara to Iran reached USD 52 pmt. This is USD 2 more than week 21. However, nowadays the Iranian export perspective seems poor due to introduction of U.S. sanctions against Iranian Republic. Consequently, Russian Traders expect the drop in sales with Iran in new grain season compared to similar period of the previous year.
The rates adjustment in the Azov water is connected with the shortage of spot tonnage. The import ability of Turkish buyers is still low, for this reason a large amount of Ship Owners, who traditionally work on short legs to Turkish ports, are open for other directions of Mediterranean Sea, including Libya, Greece, Israel and Spain. The freight rates shot up in Azov basin owing to higher demand on the spot tonnage. And now the average rate basis voyage of the Rostov-Marmara amount USD 18 pmt, which is USD 2 more than last week.
Most likely, Mediterranean long hauls will remain the similarly commercially successful with the beginning of the new season. It seems no prerequisites to Turkey readiness for intensive buying in the near future. On the eve of harvest in Turkey, the government sells grain reserves out. In this context there is no necessity to enter the international market among Turkish Importers. Moreover, Turkish national currency devalued against dollar by 30% since the start of the year. When the market environment in Turkey will recover, it can be said about export opportunities for Russia for high grain season 2018.
On the whole, despite the emerging positive trend, it is too early to talk about further freight upward movement. Moreover, many Traders suspended their commercial activity until the end of the week (June 10) due to the grain conference in Gelendzhik. This event can also lead to rates changes both in the Caspian and in the Azov regions. Firstly, there is a negative impact on number of business deals during the symposium.