The recent announcement by India that it will ban wheat exports is likely to add to the turmoil in the grain market, comments Kevin Hazel, the Manager of bulk shipping markets at Marsoft. Although Indian exports were only expected to total 10 million tonnes over the coming year, these were much-needed supplies in a market that has already been shaken by the loss of some 40 million tonnes of Ukrainian grain exports. This has led to fears of food shortages and a jump in grain prices, which is what caused the Indian government to take action.
For the dry bulk shipping market, the loss of Ukrainian grain supplies is expected to be a negative factor for the dry bulk market, although the impact should be mitigated to some extent by a modest increase in longer-haul shipments from Brazil. We see the loss of Indian exports as a further small negative for the market over the coming year, as replacement supplies will be very hard to come by. But most of these exports were expected to go to nearby countries in Southeast Asia or Africa, so the tonne-mile impact is not especially large. Still, we expect Panamax rates to be about $500-$1,000 per day lower than they would be without the loss of these supplies.