The 18th week began with bad news for most grain traders. During the period from April 24 to April 26, the remaining part of the quota (2.7 million tons) for grain export was completely depleted.
Such rapid rates of quota using have put grain traders in the predicament as a lot of them did not submit customs declarations in advance, as many companies did, but tried «to play by the rules».
In this regard, the affected companies write appeals to the Ministry of Agriculture of the Russian Federation with requests for the possibility of exporting that grain which was already purchased or loaded onto vessels or vessels were already fixed for its shipment to escape large financial and reputational losses.
The quota depleting has affected the freight rates in the Azov sea region a lot. Due to the sharp decrease in the number of goods the freight rate from Azov port to Marmara sea ports for 3k wheat shipment has become USD 19 PMT. However, a large number of spot vessels allow charterers to fix on even lower rates.
The export ban will significantly affect also the Caspian region, as corn and barley are one of the main cargoes in this sector. Shipowners are urgently trying to look for other possible loads for work, such as fertilizers and lumber. In May, the situation can improve slightly due to an increase in the Kazakhstan quota for wheat exports.
On the deep sea market there is also seen a large amount of spot tonnage due to the decrease not only in grain cargoes, but also in coal, as many factories and plants are closed for quarantine. Only the demand for fertilizers remains high due to the beginning of the new agricultural season. The freight rates for 30.000 mts of dwt cargo from Novorossiysk to Med sea ports remain on the level of USD 15 PMT.