Weak tone of the bulk market may add to grain market competition in the latter half of 2016/17
Demand for Black Sea grain traditionally shrinks in the latter half of the season as it becomes less competitive against grain from other countries, UkrAgroConsult notes.
In the current season 2016/17, the situation is aggravated by expectations of considerable wheat crops in Argentina and Australia. At the moment, low grain prices and freight rates make grain from the Southern hemisphere more commercially attractive to importers. However, persistence of the current bulk market tends could only intensify competition in the global market.
The year 2016 was one of the worst in the sea shipping industry’s history, reports UkrAgroConsult. In early 2016, the dry bulk shipping index Baltic Dry fell to an all-time low of 290 points. It recovered in the latter half of the year, having reached its peak value of 1261 points in mid-November. Nevertheless, global demand and supply of bulk tonnage remains unbalanced.