Black Sea Watch: Weekly Ukrainian seaborne grain flows ease back to August lows

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Downward pressure in seaborne Ukrainian grain flows through the Black Sea persisted during the week Jan. 9-15, with volumes declining 20% on the week to reach 490,825 mt, the lowest weekly level since mid-August, an analysis of UN's Black Sea Grain Initiative Joint Coordination Centre data by S&P Global Commodity Insights showed Jan. 16.

"Usually, grain exports come back by the end of January, beginning February," said a chartering broker pointing to the typical period when new contracts are signed, noting, however, that regional players don't expect a significant improvement in grain flows or tonnage requirements due to the damage inflicted by the Russia-Ukraine war.

In recent fixtures, Leda C, 2011 built, 81,526 dwt, was heard fixed to open Port Said Jan. 24 via Ukraine, redelivery Far East at $16,250/day or at $17,000/day and a $550,000 ballast bonus.

The UN-brokered Black Sea Grain Initiative, signed last July by Russia, Ukraine and Turkey and renewed in November for another four months starting Nov. 19, enabled the resumption of exports of grains and other foodstuffs from the three key Ukrainian ports of Chornomorsk, Odesa and Yuzhny/Pivdennyi on the Black Sea, with cumulative grain shipments under the safe passage deal reaching over 17.4 million mt as of Jan. 15, according to JCC data.

According to the JCC, the number of inspection teams remains at three, with plans to conduct nine inspections on Jan. 16, four on inbound vessels and five on outbound vessels.

"Currently, 30 vessels are waiting for inspection: eight of them waiting to move into Ukrainian ports and 22 loaded with cargo waiting to sail to their global destinations. Seventy-nine applications for participation in the Initiative have been submitted," the JCC said Jan. 15.

In addition to the lower volumes observed recently, the average cargo size during the period Jan. 9-15 shrunk 32% on the week to reach 25,833 mt, returning to mid-December levels, JCC data showed.

The largest cargo observed during the week Jan. 9-15 was a 70,799 mt shipment of corn headed to China aboard the 83,007 mt dwt, 2006-built Cuma, which departed from the terminals of Yuzhny/Pivdennyi Jan. 13.

The share of corn shipments eased to 43% of the total weekly flows during the period Jan. 9-15, in contrast to over 60% the previous week, remaining nevertheless the top grain type exported in terms of volumes, with wheat accounting for less than 20% and sunflower products almost 19%, data from the JCC showed.

Barley and soya beans accounted for the rest.

According to the JCC data for Jan. 9-15, Europe and Central Asia attracted over 48% of the grain volumes, with 27% of flows destined for East Asia and the Pacific and another 19% on its way to Middle East and North Africa.

The remaining volumes were shipped to South Asia among other destinations, JCC data showed.

In terms of income, the share of high-income destinations more than doubled on the week to reach above 32% of total grain volumes, according to JCC, with 3% of flows headed to low-income regions, and the majority of the remaining cargoes destined for middle income countries during the week Jan. 9-15.

Flows remain subdued

According to data from S&P Global Commodities at Sea, Ukrainian grain exports from the three key ports included in the Black Sea Grain Initiative continue to lag their pre-war levels in January, averaging close to 82,000 mt/day for the period Jan. 1-14, some 19% below their five-year January average for the period 2018-22, and almost 37% lower than the average daily levels observed during January 2022.

In addition, the age of the vessels operating in the trade has increased significantly, reaching over 17 years during the first half of January 2023, compared with an average age of about 11 years for vessels trading in those ports during the same period over the past five years.

Globally, dry bulk freight rates have been suffering on the back of persistent macroeconomic uncertainty and poor expectations for Q1 2023, with the Platts KMAX 9 Index, a weighted average of spot time charter equivalent rates on key Kamsarmax routes across the globe assessed by Platts, last standing at $7,451/d on Jan. 13, having slipped below $10,000/day earlier on Jan. 6 for the first time since November 2020, now trending 62% lower than the $19,684/d average for 2022.

Platts is part of S&P Global Commodity Insights

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