A 60-day extension of the “Grain Agreement” will result in high freight rates
16.03.2023 - 13:00
The expert said that the extension of the “Grain Agreement” for 60 days will practically eliminate the export of Ukrainian grain.
Extending the “Grain Agreement” for 60 days, as russia wants, will have a bad effect on the export of Ukrainian agricultural products. Due to the intensification of sales for April, freight rates will increase significantly, Director of BPG Shipping & Kronos Bulkers Genadiy Ivanov told Latifundist.
“More ships will be added to the 88 ships that are currently standing at the entrance, freight rates will be raised, taking into account that the freight market grew a lot in March, the BFI (Baltic Dry Cargo Tonnage Index – Ed.) grew twice,” — Ivanov said.
According to him, demurrage rates will be much higher than in January, all this will fall on buyers, traders, respectively, on the Ukrainian farmer.
“It may happen that everything will happen in a month, because you cannot plan anything. The grain market is forward sales. The fact that Ukraine sold mostly on the spot is all well and good, but it excludes planning, logistics, etc. Regarding the spot, it seems to me that it will be a sharp surge in freight in April and a complete lack of logistics planning,” Genadiy Ivanov added.
The expert emphasizes that the extension of the “Grain Agreement” for 60 days will practically eliminate the export of Ukrainian grain. It seems to exist, but from the technical side it is difficult to implement.
