Dry Bulk Market: 2,500 Wheat Cargoes Disrupted

The dry bulk market is in transition mode, after the disruption caused in the Russian and Ukrainian wheat exports. In its latest weekly report, shipbroker Banchero Costa said that “the Russian invasion of Ukraine has particularly strong implications for the seaborne grains trade, with a potentially significant impact on both dry bulk shipping and most importantly on global food security. Russia is the world’s single largest exporter of wheat, accounting for about 20 percent of global wheat trade in the 2020/21 season. Ukraine is also one of the top exporters of wheat, accounting for about 9 percent of global wheat trade. The conflict in the Black Sea has disrupted the flow of grains from the region.

According to Banchero Costa, “Ukraine has suspended port operations for commercial activities since February 24. Russian grain shipments from the Black Sea are continuing, but are affected by exceptionally high insurance premiums for vessels. In addition, the sanctions that have been applied make commercial transactions challenging. As a result, grain prices have soared for all major exporters. International wheat price indices are currently up by about 70% compared to a year ago. In January-December 2021, the Russian Federation exported about 31 mln tonnes of seaborne wheat, based on Refinitiv vessel tracking data. That was about 20 percent less than in calendar 2020, which was a particularly strong year, but still about 5 percent more than in calendar 2019. Russian wheat trade is generally very short haul, very fragmented, and with small cargo sizes”.

“In 2021, at least 2500 separate wheat cargoes (some of them were partcargoes) were shipped from Russia, with the average cargo (or part-cargo) size being 12,000 tonnes. There are some exceptions, of course, such as 5 separate Capesize shipments of wheat seen last year from Kavkaz in Russia to Iran. In general, about one third of wheat exported from Russia is loaded on Panamaxes, often with multiple discharge ports. The remaining two thirds of exports are on Handy or Supra bulkcarriers, or on general cargo vessels. In terms of loading areas, Russian exports are shipped almost entirely (98% of the total) from the Black Sea. Occasionally, some sporadic cargoes are shipped also from the Baltic Sea or from the Far East port of Vladivostock. There is also a fairly minor Caspian Sea trade with Iran and Turkmenistan”, the shipbroker said.

Banchero Costa added that “the main ports for Russian wheat exports are: Novorossiysk (11.3 mln tonnes loaded in Jan-Dec 2021), Kavkaz (10.2 mln tonnes), Rostov-on-Don (1.8 mln tonnes), Rostov Universal Port (1.2 mln tonnes), Taman (2.3 mln tonnes), Azov (1.8 tonnes), Tuapse (1.2 mln tonnes), Taganrog (0.9 mln tonnes). In terms of destinations for Russian wheat shipments, it is primarily the Mediterranean and Middle East. In January-December 2021, about 7.9 mln tonnes of wheat were shipped from Russia to Turkey. Turkey is by far the top destination for Russian wheat exports, accounting for 23 percent of the total. In second place is Egypt, with about 6.0 mln tonnes of wheat shipped from Russia. Egypt accounted for 18 percent of Russia’s wheat exports in 2021. In third place is Iran, with about 4.2 mln tonnes of Russian wheat in 2021.

Iran accounted for 12 percent of Russian wheat exports in 2021. In fourth place is Saudi Arabia, with 0.9 mln tonnes in 2021. Saudi Arabia accounted for 2.5 percent of Russian exports in 2021. Other major importers of Russian wheat include: Bangladesh (0.7 mln tonnes in 2021), Nigeria (0.7 mln tonnes), Libya (0.6 mln tonnes), Yemen (0.6 mln tonnes), the UAE (0.5 mln tonnes), Sudan (0.5 mln tonnes), Tanzania (0.4 mln tonnes), Kenya (0.4 mln tonnes), Senegal (0.4 mln tonnes), Israel (0.4 mln tonnes), Cameroon (0.3 mln tonnes), Algeria (0.3 mln tonnes), DR Congo (0.3 mln tonnes), Lebanon (0.3 mln tonnes), Pakistan (0.3 mln tonnes), Jordan (0.2 mln tonnes). Just about 4.5 percent of Russian wheat is shipped to European Union countries – primarily Greece (0.4 mln tonnes), Italy (0.4 mln tonnes), and Romania (0.4 mln tonnes)”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide