Miller Magazine Issue: 145 January 2022

66 COVER STORY MILLER / january 2022 SHARE OF FREIGHT IN CIF PRICE INCREASED TO 13% During 2019-2021 years, the share of freight in the price of wheat CIF Marmara was 6-7%. Freight spike 2021/22 made this share to increase to about 13%. As of January 2022, freight for 6 KMT wheat/corn vessel to Marmara is above the level of the same period last year by $28-30/MT. Most other destinations are calculated very quick- ly based premiums to Marmara. “Our analysis showed that even these premiums to Marmara became wider by $3-5/ MT y/y”, said Taras Panasyuk, Head of Freight Brokerage department at Atria Brokers. TMO GOES MORE FORWARD Ukrainian coaster freights to Marmara are historically not as good as from Russia. Combined with Lira depreciation, it keeps Ukrainian wheat trade to Turkey 50% via handy vessels mostly for TMO. The latest December WASDE report put its forecast of wheat import to Turkey in 21/22 MY at 11 MMT, +36% y/y due to worse local harvest. Such a wheat deficit, unpredictable price development, Russian wheat export duty existence + quota introduction since 15 Feb, combined with Lira depreciation switched TMO for two new tendencies: volume of new crop wheat contract- ed within tenders till 31 Dec increased by 12% y/y to 2.34 MMT; shipment period of the latest contracted cargoes within December tenders widened till end February 2022 (vs. end-January in 2021 and end-December in 2020). Ac- cording to Novik Shipping Services Agency, during the pe- riod from July till end-December shipments of wheat from Ukraine to Turkey increased by 210% or 3 times vs. the same period last year to 1.7 MMT, out of which 820 KMT (48% of shipments) were by handy vessels. This could lead us to assumption, that the share of Ukrainian wheat in TMO purchases, which were done till 31 December, increased to ~35% vs. 14% same time last year. In December 2021, some market participants noted a slight decrease in coaster freights. Herewith, 21/22 freight jump is like a shocker, which is keeping trade so far stick to “spot”, “FOB only” or “vessel in hands” deals. Taras Panasyuk, Head of Freight Brokerage Department at Atria Brokers