On the 21st week freight rates continue to rise in Azov sea region. The freight level for Azov – Marmra sea ports has already reached the level of USD 27-28 pmt for 3000 mts wheat shipment. Most charterers try to ship their cargo before the end of May, which, together with the shortage of spot tonnage, leads to a rapid increase in freight rates.
From June 2 in Russia will be introduced a flexible export fee on wheat, corn and barley, which will be calculated by the Ministry of Agriculture on a weekly basis based on the prices specified in the export contracts. The system provides that the fee will not be applied to grain exports below the base price ($200 per ton for wheat, and $ 185 for corn and barley). For export shipments exceeding this level, the floating tax will be 70 percent of the difference between the previous week’s export price and the base price.
The difficulty arises from the fact that the export price will change every week, which will lead to a corresponding change in the level of duty. This greatly complicates the work of grain traders in concluding contracts.
The impact of this flexible export fee on wheat, corn and barley is not yet clear, but most market players suppose the activity will slow down by mid-jun and freight rates will decrease.