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Australia set for grain crop

Australia set for grain crop
A rebound in Australian grain exports this year is set to provide additional demand for supramax and handysize bulk carriers operating in the Pacific region.

Australia set for rebound in grain crop

Sub-panamax bulkers operating in Pacific region to benefit from likely rise in exports

A rebound in Australian grain exports this year is set to provide additional demand for supramax and handysize bulk carriers operating in the Pacific region.

The International Grains Council has forecast that during the 2009-2010 season, from last July to June this year, Australia will export 14.5m tonnes of wheat.

This is nearly double the exports seen in the 2007-2008 season of 7.5m tonnes when a severe drought hit the nation"s producers.

?Robust grain exports from Australia are supportive of demand for sub-panamax bulkers in the Pacific, ranging from modern supramaxes of 57,000 dwt-58,000 dwt down to small handysizes of 21,000 dwt-22,000 dwt,? London broker Simpson Spence & Young said in its latest monthly report.

?In the second half of 2009 some 5.9m tonnes of wheat were shipped overseas, implying that the bulk of this trade year"s season is still due. As the forecast for 2009-2010 is even higher than last year"s trade estimate, it appears that higher shipments in the first half 2010 are in prospect.?

This season"s increased wheat output from Australia"s southern states is also expected to be supplemented by a projected 3m tonnes of barley exports, SSY said. In a similar pattern to wheat exports, only 0.9m tonnes of barley was exported in the second half of the year, with 2m tonnes expected to be shipped in the six months to June.

Additional wheat and barley cargoes will come as good news to owners operating supramax, handymax and handysize tonnage in the eastern spot market, who are increasingly competing for work as the number of ships available grows.

The fleet of 10,000 dwt-60,000 dwt bulk carriers stood at 4,629 vessels at the end of February, up 90 ships from the same time last year, SSY figures show. The small growth is accounted for by large-scale scrapping in the smaller handysize sector that actually reduced the size of the fleet.

But with another 758 vessels between 10,000 dwt-60,000 dwt scheduled to enter service in 2010 and 811 in 2011 and beyond, the fleet is set to grow dramatically, which will require additional demand to absorb this influx of capacity.

However, the broker said that the IGC"s projections show that Australia will expand market share largely at the expense of US and Argentinian grain exports, which are set for a fall in output this season.

US exports are forecast to drop 3.5m tonnes year on year to 23.5m tonnes, and Argentinian grain exports are set to more than halve from 8.5m tonnes last season to just 3m tonnes this year.

Over the last year, Asian countries, particularly China, have ramped up imports of grains and soyabeans, with supramax owners benefiting from this boom as a fronthaul voyages employ vessels for a longer periods than Pacific round voyages.

?Of the 5.9m tonnes shipped from Australia in the second half 2009, 3.6m tonnes were bound for Pacific Asia destinations,? SSY said. This included Indonesia taking in 1.1m tonnes, Japan and Vietnam importing 500,000 tonnes and South Korea 400,000 tonnes.

?Another important market for Australian exporters is the Middle East,? SSY added. ?In the second half 2009 Australian suppliers shipped 1m tonnes to the region, mainly Iraq and Kuwait. Australia"s remaining 1.3m tonnes of second half exports largely went to Africa and South Africa buyers.?

www.turkishmaritime.com.tr

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