Declining export costs observed for agricultural goods leaving Ukraine via Danube ports
Freight rates for the export of grain from the Danube ports began to fall, reported the Ukrainian Grain Association.
"The freight market in the Danube ports has been dominated by a decreasing cost trend," the report says.
According to Atria Brokers, as of Friday, rates for the transportation of corn by coasters of 6,000 tons from the ports of Reni and Izmail to the east coast of Italy decreased by $3 per ton to $65-68/ton.
Rates to Spain and Seville dropped by $2 per ton to $71-73/ton and $78-80/ton, respectively.
To the Eastern Mediterranean, freight was $65 per ton versus $65-67/ton last week.
Rates to Marmaris, Turkey – $55/ton, the east coast of Greece – $57-59/ton, Crete – $61-63/ton and Israel – $70/ton were stable.
Rates for the transportation of corn in handysizes (bulkers with a deadweight of 15,000 to 40,000 tons) to the Eastern Mediterranean decreased by $2 per ton to $58/ton.
The cost of freight to Israel and the east coast of Italy did not change at $60-62/ton, as well as to the Mediterranean coast of Spain – $65-67/ton.
The freight for the transportation of corn by Panamax (deadweight from 60,000 to 80,000 tons) from Odesa, Southern and Black Sea to southern China was $72 per ton, to the Mediterranean coast of Spain – $51-54/ton.
In September, due to Russia's strikes on the Danube ports, a sharp increase in the cost of delivering agricultural products was observed. Dmytro Solomchuk, a member of the Parliamentary Committee on Agrarian and Land Policy, stated that because of this, farmers sell wheat in the Danube ports at a loss of up to 60%.
As the Ukrainian Agrarian Council explained, enemy attacks on the infrastructure of the Danube ports makes it highly risky to store grain in local warehouses. Therefore, the shipment of wheat for export is transferred to direct transshipment. Due to enemy strikes on ports, the cost of freight increases and export by sea becomes less profitable compared to delivery by land.