People’s Unrest in Iran is Exerted on Freight Rates in the Caspian Region

Unlike freight rates in the Azov region, which sank by $ 12 per tonne over the past week, freight in the Caspian region is getting cheaper more smoothly, according to the Glogos Project freight company, within 1-2 dollars per week. If in December of last year, rates showed fluctuations in the region of $ 48-50 per ton on the route Astrakhan-North Iran, then in the second week of 2018, spot vessels are chartered at rates of $ 43-46 per ton, the company reports.

The rates are kept at a level even despite the decrease in the supply of corn and barley to northern Iran,” says Konstantin Grinevich, CEO of the Glogos Project, “where the charterers are afraid of sending ships because of the high risks of long idle ship times in the ports of Iran due to folk unrest in the country. ”

One of the reasons for keeping high rates in the region, according to the expert, is the growth of the cargo traffic of non-grain cargo across the Caspian Sea. Port employees and ship owners report the presence in the port terminals of Astrakhan of timber, metal, pulp and paper products for shipment to Iran. According to the Center for Middle and Near East of the Russian Center for Strategic Studies, following the lifting of sanctions in Iran in January 2016 from Iran, the trade turnover between Iran and Russia is growing by an average of 70% per year, and imports from Russia exceed Iran’s export operations by at least half.

Nevertheless, at present, shipowners willingly agree to work on a contractual basis, providing a fixed rate for an extended period. At a rate of $ 43-45 per ton on the spot fleet, the fixed freight cost under the contract is $ 33-36 per ton. Shipowners who are in a position to assume the possibility of further reducing freight, through long-term contracts, are trying to protect themselves from downtime.

unrest in Iran is exerted on freight rates

Recall that according to the January report of the Department of Agriculture of the US Government, the forecast of corn imports by Iran in 2017/18 was reduced from 10 to 9 million tons. According to expert estimates of the department’s specialists, the country has accumulated 62% of its grain consumption from domestic consumption during the year (10.1 million tons), which affects the pace of purchases of agricultural raw materials.

 

Source: Maritime News of Russia