New York — Three cargoes of grain have been fixed on Panamaxes to head from French ports to China via the Cape of Good Hope since Oct. 15, S&P Global Platts data showed, with Glencore the charterer each time.
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"Usually China imports from the Black Sea. But we are seeing France pick up some cargoes because of the high prices in the Black Sea," a shipbroker said.
Black Sea corn prices have jumped since the start of October, driven by a below average harvest yield in Ukraine. Dry weather over the summer led to a yield of 6.76 mt/hectare, compared with an average of 7.52 mt/hectare in the previous two seasons, according to USDA data.
The Platts FOB Black Sea Corn (Ukraine) assessment has increased to $231/mt on Nov. 4 from $199.50/mt on Oct. 1. The current price was $50/mt above the average for the previous 12 months.
A Black Sea-based shipbroker said the freight spot market for grain cargoes in November out of the Black Sea was quiet, "I can only see five [cargoes] so far," he said.
In response to the high grain prices and few cargoes, time-charter rates in the region have fallen. The last confirmed fixture was at $23,000/d on Oct. 30, though there was an offer at $19,000/d on Nov. 4.
France is not typically an exporting nation. Prior to the three recent fixtures, only six grain cargoes have made the trip from France to China since October 2017, according to Platts cFlow, trade flow data.
However, with prices rising in the Black Sea and trade tensions with typical Chinese trading partners Australia and the US, traders have had to look to less conventional trade routes to fulfill Chinese demand.
Chinese demand for grain is primarily used to feed its pig herd. Chinese pig farmers have been working hard to restore the herd to its pre-African Swine Fever level. According to a recent government survey, the herd was at 80% of pre-ASF levels.