- Baltic Exchange Freight and Commodities Forum: Hamburg
The Baltic Exchange invites Members to its Freight and Commodities Forum in Hamburg on 17 October at the Sofitel Hotel Hamburg Alter Wall.
The event will include discussion and analytical insight from leading industry figures on bulk commodity freight flows, supply-side forecasts, regulatory changes and the bunker spread outlook. Hosted by the Baltic Exchange and including an update on our benchmarks and services, this conference is open for all market participants to attend.
13:00 Registration: Networking lunch
14:00 Baltic Exchange Update: Mark Jackson – CEO
14:20 FFA Market Update – John Banaszkiewicz, Chair – FFA Brokers Association (Dry)
14:25 Bulk Commodities and Demand Side Outlook: Capt. Amrit Singh – Lead Shipping Analyst, Refinitiv
15:00 Freight Market Outlook Keynote: James Frew – Director of Consultancy, MSI
16:00 Industry Sessions; rotating break out discussions covering:
- Session A: Supply-Side Dynamics; meeting demand: Led by Chris Hughes – Global Lead, Shipping Markets – Lloyd’s Register with Amrit Singh.
- Session B: Price Discovery; indexation, use of indices and minding the gap: Led by Philippe van den Abeele, CIO – Consortium Capital Management with James Frew.
- Session C: Doubling Dry FFA Volumes and Building Route Liquidity: Led by John Banaszkiewicz, MD, Freight Investor Services with the FFA Brokers Association (Dry).
17:00 Industry Sessions Feedback Panel
18:00 Drinks & Dinner hosted by the FFABA DRY @ VLET an der Alster
- YBA night: Hamburg
The event is open to shipping market participants in Hamburg as well as those attending the Forum.
Attendees are invited to join us from 6pm.
Address: Hörsaal Hamburg Talstraße 12, 20359 Hamburg
- Member update: 9 October
The following individuals have applied for membership of an existing member company:
Company Individual Braskem Netherlands BV
Mr M Ebbing Mr M Perrucho Clarksons Platou A/S Mr Johan Raeder Haakonsen Howe Robinson & Co Ltd
Mr D K Jordan MJLF & Associates Miss L Gallinari The Air Charter Association Ltd Ms N Beuchard
The following individual has applied for Sole Trader Membership:
Any comments should be passed to Karen Karanicholas by 16 October 2019.
- Running circles around crop forecasts
Demand for agricultural products is expected to swell by 15% over the coming decade, but pressures on the industry to reduce its carbon footprint and mitigate climate change could see more tactical use of land and an evolution in crop choices.
The OECD-FAO Agricultural Outlook 2019-2028 sees a growing global population continuing to use increasing amounts of agricultural products as food, feed and for industrial purposes, with much of the additional food demand coming from regions with high population growth, in particular, Sub-Saharan Africa, India, and the Middle East and North Africa.
But there are challenges to the healthy demand growth outlook. On the supply side, the OECD lists “the spread of diseases such as African Swine Fever, growing resistance to antimicrobial substances, regulatory responses to new plant breeding techniques and responses to increasingly likely extreme climatic events” as risks to its ten-year growth picture. On the demand side, risks include “evolving diets, reflecting perceptions with respect to health and sustainability issues, and policy responses to alarming trends in obesity”.
And with nearly one quarter of all greenhouse gas emissions coming from the agriculture, forestry and land-use change sector, according to the OECD, there is significant pressure on the sector to tackle its carbon footprint.
Generally, a growing and more affluent global population and its increased food and raw material needs will drive demand for agricultural commodities over the next ten years. For example, global food use of cereals is expected to increase by 147 million tonnes over the OECD’s projection period. A total of 42%, or 62 million tonnes, of that increase is projected to come from Africa; about 90% of the expansion in African cereals consumption can be attributed to population growth, according to the OECD.
Likewise, demand for animal feed products will necessarily increase as larger herds are maintained to meet the rising demand of a larger population. As such, feed crops such as maize and soybeans are expected to rise in importance in the global crop mix.
Another driver for agricultural commodity growth can be seen in income-driven demand for higher value and more processed foods in emerging economies, while changing consumption patterns as a result of increasing health, environmental and sustainability awareness in advanced economies will also have an impact.
In terms of trade development, the OECD expects the Black Sea region will consolidate its position as a leading exporter of wheat and maize over the ten-year forecast, with most of its exports going to the Middle East and North Africa. Latin America and the Caribbean are also expected to see export growth. However, export growth in North America is expected to be flatter in line with weaker agricultural production trends.
Partly as a result of slower population growth, Europe – including the Russian Federation and Ukraine – is now a net exporter, a development which is not expected to change.
While net imports for China and Africa have been on a strong upward track, the OECD sees Chinese import growth slowing over the next ten years. Africa on the other hand, still promises strong import growth: a swelling population and increasing incomes will support demand for imported rice and wheat, in particular.
“The impact will be especially pronounced for rice, where Africa’s share of world imports is expected to grow from 35% to 50% over the outlook period,” noted the OECD.
One country to watch for agricultural trade signals over the next ten years is India. Currently, India is neither a major importer nor a major exporter. But, given the country’s size, changes in its trade balance could have a sizable effect on freight and trade markets, said the OECD.
Meeting demand for greener fuel, biofuels formed a major source of crop demand growth between 2000 and 2015. But while the OECD expects production of biofuels to continue, expansion of these is expected to be lower over the coming decade.
The shift to biofuels in Brazil, the EU and the US started in the early 2000s, driven by policy change and today, a sizable share of the maize, sugarcane and vegetable oil crops in these countries is dedicated to renewable fuels. Further growth in the EU and US is expected to be limited, but the mantle could well be picked up by emerging and developing countries as they turn to mandating greater use of biofuels. As a result of this, the OECD predicts biodiesel use will rise by 18% over the coming decade, with a new mandate in Indonesia that seeks to increase the biodiesel blending rate to 30% driving much of this growth.
There will be subtle shifts in demand from the EU too as the bloc looks to increase its support of second generation biofuels and move away from first generation technology. One outcome of this will be an expected reduction in the use of vegetable oil for biodiesel. More generally, the EU is also planning to reduce its consumption of total diesel use over the medium term, which will underpin a “projected 4% decline in biodiesel use”, said the OECD.
Globally, ethanol use is on the rise and is anticipated to increase 18%, or 21 billion litres by 2028. China will account for the lion’s share of this growth, demanding an additional 5.4 billion litres. Meanwhile Brazil, the world’s second largest consumer of ethanol, is expected to add 7.6 billion litres over the forecast window through a law mandating a 10% reduction in emissions from transport fuel by 2028, which will incentivise the expansion of sugarcane for biofuel use.
In summary, traders and brokers should look to emerging economies for commodity trade growth, but should not expected the crop mix to remain static over the next decade.
The next Baltic Exchange Advanced Freight Modelling & Trading course will take place in London March 11-12, 2020.
- An evening with Paralympic sailor Hannah Stodel
Co-hosted with HFW at their London office, BESA is delighted to invite its members and the wider Baltic Exchange community to a special presentation on Wednesday 9 October given by British Paralympic World Champion, Hannah Stodel. Hannah will share the inspiring story of her success and discuss the next challenge she has set herself: to become the first disabled sailor ever to take on the Vendée Globe. Racing 24,000 miles around the world – nonstop and without any assistance – Hannah plans to set three major records along the way.
Registration for the event begins at 5.15pm, presentation at 5.45pm and networking over drinks and canapés at 6.30pm.
About our speaker
Three times World Champion and four times Paralympian, Hannah Stodel was born missing her lower right arm but she is a force unto herself and it has not stopped her from competing in able-bodied competition. Besides her three World Championship titles and scores of other results and awards, she’s been the global leader for reinstating disabled sailing into the Paralympic games and is an ambassador for Ditch the Label (anti-bullying) charity in London. With a fierce determination, Hannah is now undertaking the greatest challenge yet, her personal “Everest of the Seas” by competing in the Vendée Globe. We very much hope you can join us for what should be an interesting and inspiring event.
Please RSVP if you wish to attend (including your intended number of guests) to Philip Bacon (email@example.com). Alternatively please contact Amanda Hastings, BESA Social Secretary, (firstname.lastname@example.org) or Camilla Robertson at HFW (email@example.com).
- BEGS Company Cup 2019
This year’s Baltic Exchange Golfing Society Company Cup will be held on Friday 11 October at West Herts Golf Club.
The event is open to teams of two shipbroking golfers. The best combined Stableford score will be the winner.
The Company Cup format is pretty simple, but has a few minor rules:
- Teams of two, competing in four-balls over one round.
- Stableford scoring system, with the combined score counting to each two-person team.
- Each team does NOT have to consist of employees from the same company, clients/visitors are very welcome.
- Teams can be two principals from the same company or different offices, or a principal and a broker or two brokers.
- There is no limit on the number of teams any one company wishes to enter, the more the merrier.
- Baltic Exchange is sponsoring the hole in one on the Par 3’s, with a main prize of a car and other prizes on the rest
- There will be additional prizes for nearest the pin, longest drive in the rough and longest drive on the fairway.
- Official handicap certificates are not required, but anyone playing off 24 or higher that does not have an official club handicap cannot score more than 30 points.
- This event can contribute as one of the sports for the overall David Bradley Cup winner.
Anyone interested in registering for the Company Cup, please contact James Pendered, it will be on a first-come-first-served basis.
Format (all times are approximate & subject to change)
Noon – Arrival time, bacon roll & coffee
13:15 – Tee off for 18 holes from the first tee
18:30 – Drinks/prize giving during dinner
The cost will be £80/player
Herts WD3 3GG
Telephone: 01923 236484 / Pro Shop: 01923 236866