Ocean Freight Rates Revert to Pandemic Lows
According to a recent analysis by U.S. Wheat Associates, since the highs of 2021, freight prices have dropped to lows not seen since June 2020. Coupled with a recent break in wheat prices, decreased ocean freight costs have helped turn the tides back in the importers' favor.
The Baltic Index price chart of dry bulk freight rates shows the impact on rates from the Russian invasion of Ukraine. On February 6, the Baltic Dry Index hit 621, a level not seen for 32 months. The index has fallen 88% from its peak in October 2021.
In recent years, dry bulk freight and Chinese economic growth have become interconnected. Vessel supply and demand, port congestion, oil prices, and the ongoing supply chain disruptions will continue to impact the market as economies normalize post-COVID. However, China remains in the driver's seat of global freight, according to U.S. Wheat Associates. The resilience of the Chinese economy will be put to the test as economic activity increases post-COVID.
If you have a story idea for the PNW Ag Network, call (509) 547-9791, or e-mail firstname.lastname@example.org