World Grain - August 2011 - 46

FEATURE

Dramatic decline
T
he ban on Russian exports, the atrocious weather that gripped Australia at the turn of the year and more recently the ﬂooding of the mighty Mississippi River have had a tumultuous impact on grain prices and trade ﬂows. But those purchasing ocean freight services remain at the mercy of far more signiﬁcant global supply and demand forces. And those forces are overwhelmingly pushing the market in one direction —downwards. The strangest aspect of ocean markets at present is that seaborne volume growth, which is rather buoyant, is not a particularly signiﬁcant factor. Instead, the cost of freight is currently being dictated — some would say overwhelmed — by vessel supply. Most analysts predict this will remain the case for at least the next year or two. It is not hard to identify why. Tonnage supply grew by more than 14% in 2010 and is expected to rise at a similar rate during 2011, according to Drewry. In the ﬁrst quarter of 2010, the global ﬂeet stood at 472.3 million dwt. A year later it had ballooned to over 550 million dwt.
46

by Michael King

Ocean freight rates for grain shipments will continue to be dictated by excess vessel supply
Port congestion, slow steaming and rising scrapping levels have tightened the supply of vessels, but such has been the overwhelming nature of deliveries that this has not been sufﬁcient to save freight rates, which have been in dramatic decline. The Baltic Dry Index was languishing at just over 1,500 points in early June, compared to over 4,000 a year earlier. Although the capesize market has suffered most over the last year —failing to beneﬁt from the 2010 rebound experienced by the panamax, supramax and handysize sectors (see individual Baltic indices) — proﬁts for ship owners and
August 2011 / World Grain / www.World-Grain.com

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World Grain - August 2011

Table of Contents for the Digital Edition of World Grain - August 2011

World Grain - August 2011
Contents
from the editor-in-chief - Last hope for Doha Round to not become a non-round
CALENDAR OF EVENTS
News review
GRAIN MARKET REVIEW
COUNTRY FOCUS
REGIONAL REVIEW: NORTH AMERICA
REGIONAL REVIEW: NORTH AMERICA - NAFTA’s impact profound
REGIONAL REVIEW: NORTH AMERICA - Millers faring well in tough economy
FEATURE - Dramatic decline
Best Flours
EDITORIAL
COVER TOPIC
CUSTOMER TALK
NEW PRODUCTS
TRENDS IN THE INDUSTRY
WHAT’S NEW?
INFO MATERIAL AND TRADE FAIRS
FEATURE - Finding more non-food uses for grain
FEATURE - IGC hears calls for predictable market
FEATURE - Plan for enhancing food security revealed
RICE QUARTERLY - Improving mill output
RICE QUARTERLY - Rice News Roundup
FEATURE - World flour trade falls 10%
FEATURE - Resilient pests
TECHNICAL PROFILE - Soybean dehulling process
SUPPLIER NEWS
ADVERTISER INDEX
World Grain - August 2011 - World Grain - August 2011
World Grain - August 2011 - 2
World Grain - August 2011 - 3
World Grain - August 2011 - 4
World Grain - August 2011 - Contents
World Grain - August 2011 - 6
World Grain - August 2011 - 7
World Grain - August 2011 - from the editor-in-chief - Last hope for Doha Round to not become a non-round
World Grain - August 2011 - 9
World Grain - August 2011 - CALENDAR OF EVENTS
World Grain - August 2011 - 11
World Grain - August 2011 - News review
World Grain - August 2011 - 13
World Grain - August 2011 - 14
World Grain - August 2011 - 15
World Grain - August 2011 - 16
World Grain - August 2011 - 17
World Grain - August 2011 - 18
World Grain - August 2011 - 19
World Grain - August 2011 - GRAIN MARKET REVIEW
World Grain - August 2011 - 21
World Grain - August 2011 - COUNTRY FOCUS
World Grain - August 2011 - 23
World Grain - August 2011 - 24
World Grain - August 2011 - 25
World Grain - August 2011 - 26
World Grain - August 2011 - 27
World Grain - August 2011 - REGIONAL REVIEW: NORTH AMERICA
World Grain - August 2011 - 29
World Grain - August 2011 - 30
World Grain - August 2011 - 31
World Grain - August 2011 - 32
World Grain - August 2011 - 33
World Grain - August 2011 - REGIONAL REVIEW: NORTH AMERICA - NAFTA’s impact profound
World Grain - August 2011 - 35
World Grain - August 2011 - 36
World Grain - August 2011 - 37
World Grain - August 2011 - 38
World Grain - August 2011 - 39
World Grain - August 2011 - REGIONAL REVIEW: NORTH AMERICA - Millers faring well in tough economy
World Grain - August 2011 - 41
World Grain - August 2011 - 42
World Grain - August 2011 - 43
World Grain - August 2011 - 44
World Grain - August 2011 - 45
World Grain - August 2011 - FEATURE - Dramatic decline
World Grain - August 2011 - 47
World Grain - August 2011 - 48
World Grain - August 2011 - Best Flours
World Grain - August 2011 - EDITORIAL
World Grain - August 2011 - COVER TOPIC
World Grain - August 2011 - CUSTOMER TALK
World Grain - August 2011 - 53
World Grain - August 2011 - NEW PRODUCTS
World Grain - August 2011 - 55
World Grain - August 2011 - 56
World Grain - August 2011 - 57
World Grain - August 2011 - TRENDS IN THE INDUSTRY
World Grain - August 2011 - 59
World Grain - August 2011 - 60
World Grain - August 2011 - 61
World Grain - August 2011 - WHAT’S NEW?
World Grain - August 2011 - 63
World Grain - August 2011 - INFO MATERIAL AND TRADE FAIRS
World Grain - August 2011 - 65
World Grain - August 2011 - 66
World Grain - August 2011 - 67
World Grain - August 2011 - FEATURE - Finding more non-food uses for grain
World Grain - August 2011 - 69
World Grain - August 2011 - 70
World Grain - August 2011 - 71
World Grain - August 2011 - 72
World Grain - August 2011 - 73
World Grain - August 2011 - FEATURE - IGC hears calls for predictable market
World Grain - August 2011 - 75
World Grain - August 2011 - 76
World Grain - August 2011 - 77
World Grain - August 2011 - 78
World Grain - August 2011 - 79
World Grain - August 2011 - FEATURE - Plan for enhancing food security revealed
World Grain - August 2011 - 81
World Grain - August 2011 - 82
World Grain - August 2011 - 83
World Grain - August 2011 - RICE QUARTERLY - Improving mill output
World Grain - August 2011 - 85
World Grain - August 2011 - 86
World Grain - August 2011 - 87
World Grain - August 2011 - 88
World Grain - August 2011 - 89
World Grain - August 2011 - RICE QUARTERLY - Rice News Roundup
World Grain - August 2011 - 91
World Grain - August 2011 - 92
World Grain - August 2011 - 93
World Grain - August 2011 - FEATURE - World flour trade falls 10%
World Grain - August 2011 - 95
World Grain - August 2011 - 96
World Grain - August 2011 - 97
World Grain - August 2011 - FEATURE - Resilient pests
World Grain - August 2011 - 99
World Grain - August 2011 - 100
World Grain - August 2011 - 101
World Grain - August 2011 - TECHNICAL PROFILE - Soybean dehulling process
World Grain - August 2011 - 103
World Grain - August 2011 - 104
World Grain - August 2011 - 105
World Grain - August 2011 - SUPPLIER NEWS
World Grain - August 2011 - 107
World Grain - August 2011 - 108
World Grain - August 2011 - 109
World Grain - August 2011 - ADVERTISER INDEX
World Grain - August 2011 - 111
World Grain - August 2011 - 112
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