On the 7th week in the Azov sea region freight rates continue to fall and the price for shipment of 3000 mts of wheat from Azov to Marmara sea ports has reached already USD 17 PMT. Although, it is possible to fix a vessel on even lower rates due to lack of cargoes.
Due to high wheat prices on the inner Russian market and, as a result, the uncompetitiveness of export prices compared to other countries offers, there are still very few shipments from Azov sea ports and most traders prefer to not make deals now and to await for market situation improvement.
However, by the end of February and the beginning of March there is a chance of price improvement. The reason for lowering prices should be not only strong competition on the foreign market, but also abnormally warm winter. Due to the lack of severe frosts, first field works this year are planned to begin earlier than usual, and therefore Russian farmers need to free up their grain storages for new season. This may favorably affect the reduction in prices and return to Russian wheat purchasing attractiveness for importing countries.
Freight rates on the Caspian market remain on the previous week level – USD 29 PMT for shipment of 3000 mts of corn from Astrakhan to Northern Iranian ports. The continuous low level freight is supported by the long awaiting of new grain batch from central regions of Russia and a rather low number of shipments compared to previous weeks.
Along with this, high demand for Russian grain from the Iranian side remains, which means that freight rates will have to increase as soon as grain stocks in ports replenish.