Danube freight rates may rise as Ukraine prioritizes edible oil exports

Freight rates on the Danube could increase following the Ukrainian government’s decision to prioritize edible oil exports. This was reported by Kateryna Kononenko, Operations Manager at Avalon Shipping.

According to her, market participants have already started contacting shipping agents with questions about the Ukrainian government’s new decision. However, as far as Kononenko is aware, the measure has not yet entered into force, and agents have not received official instructions regarding priority passage for vessels carrying vegetable oils through Danube ports.

Even if the new rules are implemented, Kononenko does not expect a significant impact on the grain market.

At the same time, reports of potential changes could already be influencing market participants’ behavior and putting additional upward pressure on freight rates.

“Rumors spread quickly in our market — sometimes faster than vessels pass through Sulina,” Kononenko noted.

In her opinion, weather conditions and vessel draft restrictions currently have a much greater impact on Danube shipping operations.

In particular, fog can restrict navigation and reduce the actual operating hours of the Sulina Canal.

Kononenko also highlighted discrepancies between the specifications of some nominated vessels and the actual navigation restrictions on the Danube. According to her, vessels with drafts of around 7 meters continue to be nominated for loading in Reni, while the Romanian authorities have published updated information indicating that the maximum permitted draft on the section between Mile 44 and Galați is 6.7 meters.

Recently, Ukraine’s Cabinet of Ministers introduced temporary priority measures for the transportation and export of Ukrainian vegetable oils by rail, through sea and river ports, and across the state border. In particular, vessels arriving to load vegetable oils in bulk for export will receive priority berthing at ports. Such vessels will also be given priority when organizing passage through the Sulina Canal.

Tags: Danube ports, freight rates