Acute shipping shortages are likely to hit exports of several items particularly soyameal.

Although the government has agreed on new season soyameal exports of nearly two million tonne, mainly to Asia, has only managed to send out only a third due to shipping shortages that have pushed up freight rates, traders said.

“Execution of contracts is becoming a nightmare because of lack of availability of shipping space and high freight rates,” said Davish Jain, chairman of the Central Organisation of Oil Industry and Trade, on Tuesday, adding “Prices are at an all-time high, there is demand from all sides.”

“Shipment problems don’t seem to be easing immediately and it appears we have to live with it,” Mr Jain said. He said freight rates had risen by $15 to $25 per tonne over the last year due to a world-wide shortage of cargo ships and high energy prices. Container freight rates have doubled, he said.

Traders said though contracts have been signed for nearly two million tonnes of soyameal sales to Vietnam, South Korea, Taiwan, China, Indonesia and Japan, the actual outflow was short of 700,000 tonnes. Ocean freight markets have ridden a four-year boom on rapidly-expanding seaborne trade, robust global economic growth and China and India’s emergence as big economic powers.

“Globally there is a shortage of ships with demand growing and a number of ships going out of circulation,” said Rajesh Agrawal, co-ordinator of the Soyabean Processors’ Association of India. “There is also congestion at Indian ports because of imports of wheat and sugar exports,” he said. Soyabean futures at the Chicago Board of Trade rose recently amid ongoing export business with China, concerns about the South America crop, and the 2008 battle for US acres.

Mr. Rakesh Joshi

Joshi Enterprise

Manager, Joshi Enterprise
Dispur, India

Free Member, Joined :02/02/2007
No of Topics Posted : 122
Reply/Comments : 16