Freight rates are decrease through the Grain Agreement

The agreement reached in mid-May on the continuation of the “grain corridor” for two months did not contribute to the expected increase in freight rates.

The reason is the large amount of free tonnage accumulated in the region, APC-Infrom notes. Also, a sharp drop in rates in the second decade of May returned the freight market to the indicators of the end of February last year.

“Having started May at 1,552 points, the Baltic Dry Freight Tonnage Index (BFI) fell to 977 points or 37% by the end of the month. At the same time, a decrease in freight conditions was observed for all types of bulk carriers without exception,” the publication writes.

The BCI index for capsize bulkers showed the highest volatility, exceeding two times the value. Having risen at the end of the first decade of May to a mark of 2,630 points, in the following two decades of the month it decreased to 1,218 points.

“For panamaxes, only a decrease in the freight situation was observed throughout the month. The BPI index for panamax, which was at the beginning of May at 1,563 points, by the end of the month decreased to 1,045 points, or by 33.1%,” said Valeryi Voynichenko, an expert of the publication.

The BSI index for supramaxes fell from 1,144 to 881 in May, falling well below the 1,000 mark. The BHI index for handy sizes decreased from 661 to 572 points in May, or by 13.5%.