Russia’s mammoth harvest sees Azov Sea freight rates surge

Freight rates across the Azov Sea have skyrocketed as Russia’s massive wheat harvest reaches ports, market sources said Wednesday.

Sources have quoted prices from $40/mt to $45/mt to take produce from the Azov Sea to the Sea of Marmara on coaster-sized vessels.

According to market sources, that is roughly twice the usual cost with one source estimating the Azov to Marmara route typically coming in at $22-24/mt for 3,000-5,000 mt sized coaster vessels.

“Good demand [for tonnage] in the Azov Sea, but I also heard that there is demand from the Azov Sea to Kerch for handy-sized vessels,” one source said.

Kerch, a port on the western side of the Crimean Peninsula, is a major trans-shipment location where the smaller coaster vessels typical of the Azov Sea are engaged to transport product to be loaded into larger handy-sized vessels of around 25,000 mt.

With many vessels engaged in that task, and the source seeing good demand for wheat particularly into Turkey, freight rates have soared.

Russia’s winter wheat harvest has taken production to 87.9 million mt, according to data from the Russian ministry of agriculture published on Tuesday, a rise of 12.1 million mt on the same stage of 2016.

Ukraine also has a substantial corn harvest, although wet weather has delayed some of the harvesting while weather complications earlier in the season are likely to cut the overall production level and see it fall short of expectations.