GLOBAL Dry bulk shipowners are facing increasing uncertainty as conflicts disrupt key commodity trades and the grain market faces further disruption in the coming months.
“Maritime chokepoints can never be used as instruments of coercion,” United Nations Secretary-General António Guterres told reporters in New York on Monday. “The movement of food, energy and essential goods must not be blocked.
However, there are already disruptions to both the tanker and dry bulk markets although the impact is very different between the two sectors.
In the tanker market, there are cargoes available but operators are increasingly challenged to move them safely. VLCC day rates have soared into six figures, with Clarksons reporting a rate of $800,000 a day on one Gulf fixture.
In dry bulk shipping it’s a different story. Bulk carriers are plentiful but the availability of cargoes, especially grain, is becoming a major concern.
Grain is the third largest major dry bulk commodity in the world after iron ore and coal. Exports from the Black Sea and the Sea of Azov account for a large share of the global grain trade.
Ukrainian and Russian ports in the region account for about a third of the world’s wheat exports. But the growing conflict has disrupted those flows, and analysts are concerned about possible shortages of several kinds of grain in coming months.
The disruption provides a challenging market backdrop for dry bulk owners. With ships still available, lower or interrupted cargo flows could limit employment opportunities and add further pressure on earnings.
Therefore, the outlook for grain shipping is increasingly linked to how the conflict unfolds and whether major exporting regions can continue to reliably supply international markets.
