In the reporting week freight market of Azov basin continued to decline. Rates from Rostov on the Black sea fell below$ 20 which confirms that falling demand for tonnage in the region. The price of wheat on the basis FOB ports of Azov continued its growth. The main reasons for this were added the growing cost of cargo delivery to the port. Transport companies, arranged strike from-for low tariffs for grain transportation have been able to achieve from Exporters increase in interest rates that led to higher prices of products.
The amount of spot tonnage growing. According to the rules of formation of the caravan, the court is not included in ice-breaker assistance for as long as they did not confirm the port or berth of loading, so opening the idle fleet in the Kerch area. This enables Owners to more easily consider the proposals and from the ports of the Black sea, despite the fact that the freight on the flights from these ports in Turkey and Mediterranean sea also have tumbled compared to a week ago. The decline in demand from key buyers are reflected not only in the Russian grain.
In the Caspian region there is a balance of supply and demand on the fleet. Rates from Astrakhan remain at the level of mid-to high 30's. Heavy ice situation in the WCC continues to narrow the available number of fleet and does not allow rates to fall. Rates from Aktau and Makhachkala are reduced faster, because the majority of Shipowners are avoiding flights in ice, trying to fixout their vessels from free from ice ports. In this regard, raids data ports formed clusters of 5-8 boats that are willing to wait their turn for loading, despite the fact that freight from Astrakhan above 10-12 dollars.
Domestic farmers are already preparing for the next grain season. Due to the absence of strong frosts this winter and abundant precipitation in autumn, winter wheat crops are in favorable condition. According to various forecasts, the total wheat crop will be about 67 - 72 million tons. Given that in 2018 were collected approximately 70 million tons of wheat, we can expect that the season of 2019, will be comparable to the previous one.
Many market participants agree that the current, extremely unfavorable situation, when the commodity market is not rallying, but Traders are unable to reach agreement on price in the medium term (March – April) will change for the better. Manufacturers sooner or later will be forced to sell reserves of grain before the new harvest in particular, to Finance planting. The demand at a high price in the domestic market will not be saved.