Due to acute shortage of fleet, lack of places of storage for applicants to the ports of grain and the high freight rates of the Russian traders importers impose contracts on a “free on board” which means the sale of goods in the port, including the loading of grain on the ship. A search of the ship and delivery of cargo in the importer’s country at such delivery basis are the responsibility of the buyer.
“Not long ago, the charterers, on the contrary, insisted on contracts CIF (cost, insurance and freight), as in this case could earn not only on sale, but the delivery of grain, explains a new trend Konstantin Grinevich, Director General of the brokerage company “glogos proekt”. – With the current high freight rates, shipping of grain for many rather work at a loss than additional earnings”.
Since last year, the cost of shipping grains for export routes has almost doubled from Rostov/Azov to the ports of Marmara sea freight rates increased 1.6 times and amounted to $ 36 per ton, in Izmir – 1.8 times ($39 per ton), Mersin – 1.5 times ($50 per ton) in Egypt is 1.6 times ($55 per tonne).
While importers agree to the changed conditions traders: good quality harvested this year crop, the willingness of Russian producers to reduce the price for grain and a weak ruble provides benefits from cooperation. However, over time, the costs may outweigh the. “This situation creates tension among market participants, – said Konstantin Grinevich, the shipowners are in no hurry to conclude contracts for freight, expecting further increase in rates, traders are not able to find free fleet, shift the responsibility for the delivery of the goods on the shoulders of the buyer. No real investment of the state in infrastructure and export routes, the country risks losing status as a leading provider of grain”. Moreover, Europe, USA and Canada, the principal competitors of Russia, problems with facilities for storage and processing of grain do not.
Russian farmers for the second consecutive year are the world leaders in the supply of grain abroad. If in 1980-1990-ies of the USSR has imported 30 to 47 million tons of grain a year, now one of Russia stands ready to put over 40 million tons to foreign markets, not to mention Ukraine and Kazakhstan. While the port terminals, storage facilities and grain transportation on export routes were not prepared for the number of the arriving grain. The falling price on the market is not conducive to active sales, but the lack of storage is forcing traders to sell surplus goods at a disadvantageous price, despite the high freight rates.
Recall that according to the forecast of the company “SovEcon” grain exports this year may reach a record 44 million tons, including wheat exports – 32.4 million tons, barley to 4.3 million tons, corn – 5.7 million tons. According to experts of the Agency, further export growth is hampered by infrastructure limitations.