Market Update 22nd July 2024
July 22, 2024
International Prices Desiccated Coconut The international price for desiccated coconut remains steady across different regions.…
The Times reported last week that Maersk Shipping warned that global trade conditions will be worse and longer lasting than anticipated due to weak economic growth and customers reducing stocks.
The Danish transportation and logistics group reported that worldwide demand for containers, which is typically used as an indicator for global trade conditions, could fall by up to 4% this year, compared to the previous estimate of no more than 2.5%.
The inventory correction that began at the end of 2022 appears to be prolonged and is expected to last through year-end, according to Maersk.
During the April to June quarter, the number of containers that Maersk loaded onto ships dropped by 6% from a year earlier, and average freight rates halved. Vincent Clerc, the CEO, said, “The business is operating in a subdued growth environment following the pandemic fuelled years”.
However, this year freight rates have fallen due to a global economic slowdown, and hundreds of new container vessels ordered during the pandemic have started to come onstream, putting further downward pressure on pricing in the industry.
Interestingly off the back of this report, Drewry’s World Container Index increased by 11.8% to $1,761.33 per 40ft container this week.
So even with more capacity, shipping prices are still volatile and liable to change.
Recently, Russia declared it will no longer participate in an agreement allowing Ukraine to transport its grain through Russian ports situated in the Black Sea. This decision has disrupted a vital deal that previously helped prevent a global food crisis. Unfortunately, Russia’s move can potentially affect food prices and contribute to food insecurity worldwide.
Ukraine is recognised as “Europe’s breadbasket” for contributing nearly 10 per cent of the world’s wheat exports and almost 50 per cent of the global supply of sunflower oil.
The majority of Ukraine’s grain exports, nearly 90 per cent, are shipped from ports in the Black Sea, which the Russian Military is now targeting.
Also reported is the fact that high temperatures and unprecedented rainstorms in Europe have affected crop yields, with most forecasting a significant drop in production.
Q4 is liable to be very uncertain for many, and with coconut prices at a low, waiting may be a bad move for many buyers hoping that prices will remain low.
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July 22, 2024
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