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  • zz_azimi zz_azimi Aug 16, 2013 2:14 PM Flag

    Panamax rate to rise 50% coming weeks

    SINGAPORE – Soaring imports of wheat by China and Pakistan are set to drive up freight rates for smaller dry bulk cargo ships in the next few months, Asian shipowners say.

    The potential hike in wheat volumes could fuel an increase of as much as 50 per cent in the number of charters for Panamax-size ships, shipbroker figures show.

    “We think there will be a positive impact on rates,” said Mats Berglund, chief executive of Hong Kong’s Pacific Basin Shipping, describing China’s need for higher imports.

    China is estimated to need an extra 10 million tons of wheat import wheat to make up a shortfall caused by crop failures linked to the weather.

    That would be in addition to the more than 3 million tons of wheat it was already due to import in the year to June 2014.

    Pakistan is set to require up to 1 million tons of wheat in the year to March 2014 after domestic production was hit by several factors, including a delay in planting.

    Grain shipments favor smaller Handysize, Supramax and Panamax ships, varying between 32,000 and 76,000 deadweight tons, rather than large Capesize vessels that are almost exclusively used to haul iron ore and coal.

    One Panamax-sized cargo, equal to 66,000 tonnes, would need to be shipped every day between August 1 and December 31 if China is to import an extra 10 million tons of wheat this year, said Khalid Hashim, managing director of Thailand’s Precious Shipping.

    By comparison, more than 50 Panamax ships, carrying grain, coal and iron ore, were chartered in July, according to figures from Clarkson Research Services, a data provider widely relied on by the global shipping industry.

    Hashim, whose company operates 40 dry cargo vessels, added: “I am sure that this will have a positive impact on the dry bulk markets.”

    Dry bulk freight rates would be buoyed by a strong North American grain harvest, Berglund added.

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