Government rules out lifting ban on wheat export

NEW DELHI: The Centre has ruled out lifting the ban on wheat exports but said the shipments of the foodgrain through diplomatic channelswillbeconsideredonacaseto-case basis. India, the world’s second-largest wheat producer, banned wheat exports in May 2022 as part of measures to control rising domesticprices.

Asked if wheat exports will be allowed, Consumer Affairs Secretary Rohit Kumar Singh said, “No chance at all.” The Government is supplying some quantity of wheat to a few countries like Nepal and Bhutan via a Government-to-Government trade arrangement. “We will take a call if thereisarequestfromtheMinistryof External Affairs,” he added. Citing reasonsforcontinuingtheexportban, Additional Secretary of the Food Ministry Subodh Kumar said India is not a traditional wheat exporting nation. However, the Country exportedwheatinthelastthreeyears owingtosurplussupplies.

Thecountryexportedwheatinthe rangeof2-7milliontonnesannuallyin the last three years. Last year, wheat exportswere5milliontonnes,hesaid. “The wheat production remained lower during last year because of climatic reasons. However, production this year is higher than last year and availability is expected to be 10 million tonnes more when comparedtolastyear,”hesaid.Thisis required for local consumption and to make available wheat at reasonable prices in the domestic market, he added.

Visakhapatnam Port attains 4th position in cargo handling in India

VISAKHAPATNAM:

The Visakhapatnam Port Authority (VPA) handled 73.73 million tonnes of cargo for the fiscal 202223 and achieved fourth position among all the major ports in the country, and attained second position on the East Coast, according to a release here on Tuesday. During the Financial year, the port handled 73.73 MT against 69.03 MT during the corresponding period of previous year, with a growth rate of 7%, the releaseadded.

TheVPAChairmanMadhaiyaan Angamuthu attributed the growth rate to the collective efforts of every stakeholderandassuredthattheport would attain further top rank in the Countryinfuture.

Container data, futures and forward markets

Data plaorms offering insights into the container market are opening up forward markets as container futures begin to emerge.

OSLO: Long before “futures” marketsforfreightcameonthescene in the 1980’s and 1990’s, enabling drybulkandtankerowners,operators and cargo shippers to manage exposure to the ups and downs of shippingmarkets,theyhad“forward” markets. Examples of transactions in the long-established dry and tanker forward markets, the province of the actual principals (rather than as a realm for outside traders) would include period time-charters and contractsofaffreightment.

Many of these deals were confidential, but as these markets were opened up to traders, electronic trading venues with online price visibility offered what economists have called “price discovery”meaning that anybody with a cellphone or computer could get a sense of the market by pulling up a screen.

In contrast, the liner sector has seen extensive contract coverage between larger cargo interests and the big carriers; an intermediary sector of smaller carriers—not operating vessels, but, instead, securing space on larger vessels—emerged to handle smaller cargomovers.

Simplistically, the economic rationale was the same in the liner markets as it was for the bulk side; carriers hoped to lock in revenues at healthy levels, while the cargo shippers hoping to lock in dips, if they occurred. However, the difference was that the liner markets offered little or no visibility into what commodity watchers would call“theforwardcurve.”

While there are numerous indices ofcontainerizedfreight,mostofthese provideaviewintothespotmarketon particulartrades,butnotintopossible marketmovesinthemonthsahead.

Importantinsightsintotheforward markets come from a benchmarking platform, Xeneta, which among many roles,gathersdatafromavastarrayof shippers. Importantly, its analytics provide real insights into the forward curves in the liner sector- based on anonymized inputs over its wide customer base on key routes. Its lead market analyst, Peter Sand, once a lead analyst at BIMCO, is no stranger to the forward markets on the bulk side and has infused this important sensibility into Xeneta’s strategizing for cargo interests trying tooptimizetheirprograms.

Xeneta’s recent online webinar offered very good insights and visibility into the forward markets for linerfreight.

Peter Sand and his colleague, Emily Strausböll, discussed the NorthEuropetoUSEastCoastroutea profitable one for carriers or “the only one where carriers are not losing money in the spot trades”, accordingtoSand.

Looking at the forward curve, Strausböll said that this trade is

“…finally facing reality…”, with Xeneta data pointing to a sharp downward slope—a backwardation structure with short term contracts now below the longer-term contracts by roughly $1,400/feu. This contrasts with year-ago dynamics when shortterm rates exceeded contract deals by as much as $3,000/feu. Over the past three months, the contract rates havedroppedbyaround32%onNorth Europe/USEastCoast-whilethestill profitable spot rates have plunged by 50%,toaround$2,500/feu.

For cargo-side customers of platforms offering market information, such data on the rates andtheirmovementscaninformtheir strategies of bidding for space on vessels or holding back. The dynamics of the different routes varywidely;spotratesoftheFarEast toEastCoastSouthAmericarunhave barely moved, down only 3% in the past three months to around $3,000/feu, while contract rates have plunged by a third during the same timeframetoaround$2,400/feu,below thespotrates.

Futures trading, with real price discovery from the interactions of buyers and sellers, has begun to emerge. On container routes quoted by the online platform Freightos, with support from London’s Baltic Exchange, financial clearing has been offered in Chicago since 2022, and, now, in Singaporeahubforrealcargoes.