The demand outlook for the coming 12 months, and opportunities arising from geographic and geopolitical changes were under the microscope at the Agri-commodities session moderated by Maryana Yarmolenko Stober, the president of WISTA Switzerland, at this year’s Geneva Dry summit.
Pierre-Francois Mahieu, a global wheat trader with Olam, told delegates he was expecting a recovery in grains demand for the next 12 months, with Costas Delaportas, president and CEO of DryDel Shipping, also forecasting “moderate growth”, while Ghigo Ravano, executive chairman of IFCHOR GALBRAITHS, predicted there will be increased congestion.
“The Chinese are stepping away from the US Gulf. Most of the cargo of grains is coming from the east coast of South America, Brazil and Argentina,” Delaportas said at the session on April 29, some two weeks before the US and China found some trade agreement. Congestion out of these two South American nations has more than doubled in the space of a month in terms of waiting time days. The Greek shipowner also discussed how the Chinese have been building up their own grain facilities a lot of late.
Other exporting grain countries, such as India and Black Sea countries, have reduced dramatically their exports of grains, Delaportas relayed, leading to Southeast Asian nations sourcing from elsewhere, something he said was positive for tonne-miles.
Alex Haubert, director of Hong Glory Bulk, noted how the market had become far more spot-orientated. “There is less forward commitments from end users to buy,” he said, noting here there was more freight risk sitting on the traders.
Olam’s Mahieu said the market had been “very efficient” to switch Chinese supply from the US to Brazil, as had American sellers in finding alternative destinations, all of which was proving positive from a tonne-mile perspective.
“It’s a very dynamic market, very uncertain and very hard to hedge,” Mahieu said.
The ageing dry bulk fleet was also discussed as were expanding ports and secondhand prices, with Delaportas arguing that following a recent 20% drop in prices now was a good time to buy vessels.
Geneva Dry, the world’s premier commodities shipping conference, returns on April 28 and 29 next year, with delegate passes being limited. Tickets are now on sale here.
