Dry Bulk Market: Mid-Sized Bulkers to Gain from Grain Trade
According to Intermodal’s Research Analyst, Ms. Chara Georgousi, “in Australia, the Australian Bureau of Agricultural and Resource Economics and Science (ABARES) raised its marketing year 2022/23 (October-September) forecast for Australian wheat exports to 28 million MT, from 27.5 million MT in the previous year. In January, the country shipped a record 3.34 million MT of wheat, a figure showing a 26% y-o-y increase. Exports were primarily driven by China’s increased demand, as the country’s wheat stocks stand below the seasonal average and are not adequate to cover post-Covid rising demand. Exports to China accounted for 28% of Australia’s total January exports. Other destinations were Indonesia, accounting for 16% of the exports, South Korea, and the Philippines with a share of 10% of total cargoes. Australia is set for another record month for wheat exports in February, with 3.1 million MT of cargo confirmed, while 510,000 MT are destined for China. Another 1.3 million MT of wheat is currently scheduled for March”.
“In the US, February wheat exports rose marginally to 1.8 million Mt. However, US wheat exports are forecast to slightly soften for the remaining 2022/23 MY due to firm competition from the Black Sea, Canada, and Australian wheat. According to Refinitiv’s estimates total 2022/23 US exports are seen at 20.5 million MT, 2.5 million MT higher than the previous estimate. In Kazakhstan, following record wheat production, which is seen at 16.4 million Mt in 2022/23 (the second largest crop after the 2011/12 season’s record crop of 22.7 million MT), according to USDA, exports of wheat are seen at 10.5 million MT, by 2.0 million MT higher y-o-y. So far this MY, Kazakhstan has exported high volumes of wheat to its main importing countries in Central Asia. In Russia, February shipments remained subdued at 2.7 million MT, 30% lower m-o-m. However, the export pace seems to recover in March so far. In particular, March exports may reach 4.2 million MT, hitting a seasonal 5-year high. Taking into account recent exports and expectations for a rapid shipping pace, 2022/23 MY Russian wheat exports are seen at 44 million MT, according to Refinitiv”, Ms. Georgousi said.
She added that “Black Sea wheat continues to experience logistic difficulties related to the war. According to the Ministry of Agrarian Policy and Food of Ukraine, February exports of wheat stood at 11.4 million MT, compared to 18.4 million MT for the last year’s same period. Yet, seaborne wheat exports climbed to 1.0 million MT in February, an 18% m-o-m increase, but almost the same y-o-y. In the scenario of the successful renewal of the Black Sea grain export deal, Ukraine’s 2022/23 wheat exports could reach 14.2 million MT, according to Refinitiv”.
Intermodal’s analyst concluded that “seaborne-wise, we expect to see some support from the grain trade to the dry bulk market in the coming months. More specifically, in the wheat market, a favorable combination of the current increased activity in the USG and Australia paired with the recovery of Chinese demand, as well as the country’s low inventories, will particularly favor the mid-sized bulkers”.
Nikos Roussanoglou, Hellenic Shipping News Worldwide