Sea freight remains affordable, but demand from South America could change the situation

The maritime transportation market in Ukraine is stable, but the struggle continues between shippers, who insist on reducing rates, and shipowners, who consider tariffs to be minimal, experts from Spike Brokers said.

Current freight rates

• Port of Izmail :
  • Romania – 8-9 €/t (1-3 thousand tons)
  • Italy (east) – $26-28/t (5-7 thousand tons)
• Port of Chornomorsk :
  • Italy (east) – $15-16/t (30-35 thousand tons)
  • Spain (east) – $16-18/t (25-30 thousand tons)

A decrease in freight rates of $5-15/t since the beginning of the season has allowed traders to increase grain purchase prices for farmers, but this has not significantly increased sales volumes. The expected increase in new crop supplies will reduce the availability of free tonnage, which may cause freight rates to rise and limit further growth in purchase prices.

Export and transportation volumes

• Grain exports from February 1 to 25 were 2.96 million tons (versus 4.7 million tons a year ago). In total, in the MY 2024/25, exports reached 28.65 million tons.
• Road transport :
  • Exports for 24 days of February – 248.4 thousand tons (+41.6% compared to January).
  • The export leaders are sunflower oil (31.2 thousand tons) and poultry meat (18.7 thousand tons).
  • The cost of transportation within the country has decreased by $2-4.

Railway logistics
The cost of transporting grain to the western border and ports has decreased due to reduced demand. However, export rates to the EU remain stable due to long-term contracts.

• Grain delivery from the western border of Ukraine :
  • Italy – €35-40/t (old harvest), €45-50/t (new).
  • Germany – €33/t, Netherlands – €40/t.
  • The difference between the rates for the old and new harvest is €5-10/t.

Conclusion: Demand for shipments from South America and the growth of new crop exports could change the maritime transportation market in the coming months, pushing up freight rates.

Tags: freight rates