World Grain - July 2024 - 32

shipping volatility
Slew of disruptions affecting freight rates
by Michael King
A
fter the COVID years, normal was supposed
to be back on the agenda. Instead, geopolitical
strife and heightened weather risks are stalking
the oceans, creating snarl-ups, market imbalances and
routing conundrums for anyone in the business of grain
shipping.
The partial closures of the Red Sea and Suez Canal
due to attacks by Houthi militants have been gamechangers
for shipping this year. Bulk shipping has been
less impacted than the container sector quite simply
because more bulker owners are willing to risk rocket
attacks to avoid diverting around southern Africa. Even
so, the disruption has had a significant impact on operations
and the cost of shipping commodities in 2024.
" Our analysis suggests that the restrictions associated
with the Red Sea/Suez have added approximately
40% to 50% to freight rates across the dry bulk markets, "
Plamen Natzkoff, head of Dry Bulk Freight and
Commodities Research, MSI, told World Grain.
The other key artery for shipping, the Panama Canal,
also has been a bottleneck for shipping this year with
capacity restricted due to drought, constraining access
for bulk carriers.
This had a particularly detrimental impact on US
32
grain exports to Asia via the Mississippi River system
and the US Gulf, said Ken Eriksen, managing member
of Polaris Analytics and Consulting.
" US grain exports via Panama went to almost zero
on some weeks during the peak season, " he said. " At
first, they were going through Suez and then the Red
Sea, but of course, that quickly stopped. This diverted
cargo away, and Brazil was able to pick up some of that
market in Asia. But this will come back as the situation
improves. "
The cost of divergence
The increased sailing distances resulting from diversions
to avoid the world's two famed Canals have combined
with rising demand to put strong upward pressure
on freight rates across the dry bulk sector.
" The dry bulk freight markets performed unseasonably
well through the first few months of 2024, and had
their best Q1 since 2010, " explained Natzkoff.
" In terms of cargo volumes, Brazil had its highest
ever Q1 exports of iron ore as dry weather at the end
of 2023 allowed miners to boost output. The large distances
between Brazil and its main iron ore customers
in China served to leverage the impact of strong
July 2024 / World Grain / World-Grain.com
©Olivia-stock.adobe.com
http://www.World-Grain.com

World Grain - July 2024

Table of Contents for the Digital Edition of World Grain - July 2024

World Grain - July 2024 - Intro
World Grain - July 2024 - 1
World Grain - July 2024 - 2
World Grain - July 2024 - 3
World Grain - July 2024 - 4
World Grain - July 2024 - 5
World Grain - July 2024 - 6
World Grain - July 2024 - 7
World Grain - July 2024 - 8
World Grain - July 2024 - 9
World Grain - July 2024 - 10
World Grain - July 2024 - 11
World Grain - July 2024 - 12
World Grain - July 2024 - 13
World Grain - July 2024 - 14
World Grain - July 2024 - 15
World Grain - July 2024 - 16
World Grain - July 2024 - 17
World Grain - July 2024 - 18
World Grain - July 2024 - 19
World Grain - July 2024 - 20
World Grain - July 2024 - 21
World Grain - July 2024 - 22
World Grain - July 2024 - 23
World Grain - July 2024 - 24
World Grain - July 2024 - 25
World Grain - July 2024 - 26
World Grain - July 2024 - 27
World Grain - July 2024 - 28
World Grain - July 2024 - 29
World Grain - July 2024 - 30
World Grain - July 2024 - 31
World Grain - July 2024 - 32
World Grain - July 2024 - 33
World Grain - July 2024 - 34
World Grain - July 2024 - 35
World Grain - July 2024 - 36
World Grain - July 2024 - 37
World Grain - July 2024 - 38
World Grain - July 2024 - 39
World Grain - July 2024 - 40
World Grain - July 2024 - 41
World Grain - July 2024 - 42
World Grain - July 2024 - 43
World Grain - July 2024 - 44
World Grain - July 2024 - 45
World Grain - July 2024 - 46
World Grain - July 2024 - 47
World Grain - July 2024 - 48
World Grain - July 2024 - 49
World Grain - July 2024 - 50
World Grain - July 2024 - 51
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World Grain - July 2024 - 53
World Grain - July 2024 - 54
World Grain - July 2024 - 55
World Grain - July 2024 - 56
World Grain - July 2024 - 57
World Grain - July 2024 - 58
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World Grain - July 2024 - 60
World Grain - July 2024 - 61
World Grain - July 2024 - 62
World Grain - July 2024 - 63
World Grain - July 2024 - 64
World Grain - July 2024 - 65
World Grain - July 2024 - 66
World Grain - July 2024 - 67
World Grain - July 2024 - 68
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https://digital.world-grain.com/sosland/wg/world-grain-december-2022
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https://digital.world-grain.com/sosland/wg/world-grain-april-2022
https://digital.world-grain.com/sosland/wg/world-grain-march-2022
https://digital.world-grain.com/sosland/wg/world-grain-february-2022
https://digital.world-grain.com/sosland/wg/world-grain-january-2022
https://digital.world-grain.com/sosland/wg/world-grain-december-2021
https://digital.world-grain.com/sosland/wg/-world-grain-november-2021
https://digital.world-grain.com/sosland/wg/world-grain-october-2021
https://digital.world-grain.com/sosland/wg/world-grain-september-2021
https://digital.world-grain.com/sosland/wg/world-grain-august-2021
https://digital.world-grain.com/sosland/wg/world-grain-july-2021
https://digital.world-grain.com/sosland/wg/world-grain-june-2021
https://digital.world-grain.com/sosland/wg/world-grain-may-2021
https://digital.world-grain.com/sosland/wg/world-grain-april-2021
https://digital.world-grain.com/sosland/wg/world-grain-march-2021
https://digital.world-grain.com/sosland/wg/world-grain-february-2021
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