- Escrow Service for Baltic members
The Baltic Exchange’s Escrow Service, which enables members to hold deposits for ship sale transactions, now supports transactions where the buyer, seller or broker is a Baltic Exchange member. The service is run out of Singapore and led by Chris Jones, the Baltic Exchange’s Head of Asia who is a former Sale & Purchase shipbroker with over 40 years of experience.
Based on a new Baltic Escrow Form developed by the Baltic Exchange, the service is subject to the Singapore Exchange’s (SGX) detailed compliance and money laundering procedures. OCBC Bank provides the joint deposit account.
Contact Chris Jones at firstname.lastname@example.org for further details.
- Shipping Economics & Investment – training course
Understand the micro-economic structure of the shipping markets by attending the Baltic Exchange’s Shipping Economics & Investment course (London, 14-15 January). The two day programme looks at the fundamentals of shipping investment including cash flow projection and analysis, capital budgeting techniques, capital structure and cost of capital in shipping projects, investment management of shipping projects, asset allocation and shipping investment strategies.
The course is led by Professor Michael Tamvakis and Professor Amir Alizadeh, both of Cass Business School, City University London.
Click here for full details.
- Member update: 28 November
The following companies have applied for Corporate Membership:
Company Individual China Development Bank Financial Leasing Co Ltd Mr J Zhang Mr Mr Gu Miss T Zuo Mr Y G Liu CITIC Commodities Pte Ltd Mr K Zhang Ms C Chen Langlois Enterprises Ltd Mr A Meimaridis Mr S Giachountis Mr N Thanos-Epifaniadis M2M Panamax Pool Ltd
Mr N Gavriilidis Mr S L Rodley
The following individuals have applied for Membership under an existing member company:
Company Individual Affinity (Shipping) LLP Mrs A M Y Camanand Diamond Star Shipping Pte Ltd Mr S Ogawa E D F Trading Limited Mr M Craddock Fearnleys A/S Mr S B Svenning JERA Trading Singapore Pte Ltd Mr B T J Boyne
Any comments should be passed to Karen Karanicholas by 5 December 2018.
- A not-so-sweet tooth
Sugar, sucre, azúcar… whatever you call it, the sweet stuff is big business for shipping. Last year, record volumes of sugar were produced globally and exports shot up 8%, according to US’ Foreign Agricultural Service (FAS) figures. But fast forward to the latest 2018/19 production forecast and the FAS is expecting the surge to lose momentum. From the 2017/18 high of 195m tonnes, production is expected to slip back to 186m tonnes, and as a result exports are predicted to drop 10% to 58m tonnes.
In its Sugar: World Markets and Trade report for November, the FAS said that the reduced forecast is mainly down to the 8m-tonne fall in Brazil’s production due to unfavourable weather and more sugarcane being diverted towards ethanol production. Furthermore, exports are down and domestic consumption is up because of growth in markets like Indonesia and India. But because huge Indian stock-building has more than offset lower stocks in the EU and China, world stocks are predicted to go up to a new high of 53m tonnes.
According to the report, China’s production is predicted to increase for the third consecutive year, this time to 10.8m tonnes, because of expanded area and favourable weather. As a result, imports are anticipated to be lower for the third consecutive year, especially after the safeguarding measures amended in July this year making extra duties apply to all suppliers. Previously, certain supplying nations had been exempted from the duties. Consumption is forecast to rise to cater to increasing urban population growth. Meanwhile, US production is estimated down 3% to 8.2m tonnes for 2018/19. Imports, at 2.5m tonnes, for the US are down 14.5% based on projected quota programs and the calculation of US needs (as defined in antidumping and countervailing duties suspension agreements). Consumption is predicted to be relatively flat, although stocks will decline. As for the EU, production is estimated to drop 1.4m tonnes to 19.5m marking a return to average yields in comparison with the record of 2017/18. Due to reduced supplies, exports are anticipated to drop 600,000 tonnes to 3m tonnes. With consumption unchanged, stocks are expected to tighten.
India’s sugar production is expected to increase 1.8m tonnes to a record 35.9m tonnes in 2018/19 because of greater area and yields — despite weather and pest concerns — eclipsing that of Brazil for the first time in more than 15 years. Consumption is also predicted to hit a record 27.5m tonnes because of a rising population and robust food processor demand. Exports are expected to more than double to 4m as sugar mills look to lower stocks, which are anticipated to go up to a record 18.1m tonnes.
World production is forecast to be down 9m tonnes to 186m tonnes
The continuing US–China trade war looks to be pushing China “to sweeten ties with” India. According to an Indian official, a delegation will visit the country in December to meet with mill officials and inspect logistics infrastructure, with Chinese refiners considering buying “unprecedented amounts of Indian raw sugar”. India is reportedly planning on exporting 2m tons of raw sugar to China from next year, with an Indian entity having already contracted with COFCO International to export 50,000 tons, and the nation is positioned to turn into a “significant” exporter to China.
Brazil’s production looks set to drop 8.3m tonnes to 30.1m tonnes because of less sugarcane yields and more sugarcane being diverted towards ethanol production as record global sugar supplies have led to weak prices. Exports are anticipated to fall similarly to 19.6m tonnes, decreasing Brazil’s exports market share to 34% (down from a five-year average of 45%).
Back in Asia, production for Thailand is forecast to decline 900,000 tonnes to 13.8m tonnes for 2018/19 on lower sugarcane yields and sugar extraction rates because of lower-than-expected precipitation. Consumption is slightly down thanks to less industrial demand in response to a new sugar excise tax on beverages. With high supplies from record production last year, exports are set to hit a record 11.5m tonnes, taking stocks down to 6.9m tonnes. Pakistan’s production is forecast to be down 900,000 tonnes, to 6.5m tonnes, because of reduced farming areas as farmers moved to other crops like cotton and corn thanks to better prices and a quicker return on their investment. Consumption keeps modestly rising with a developing food processing sector and a growing population, but exports and stocks are predicted to decline because of the lower production, while final levels will depend on government policies.
The forecast production of Mexico will stay unaltered for a seventh year at 6.4m tonnes. Exports are forecast down slightly, with lower anticipated exports to the US partially offset by a non-U.S. exports rise of 326,000 tonnes. As for Russia, the country’s production is estimated down 400,000 tonnes to 6.1m tones for 2018/19 on smaller yields. Consumption, exports and stocks are all set to be down with the lower production. The nation has been a net sugar exporter since 2016/17. Finally, for Australia, production is forecast up 4% to 5m tonnes on greater yields thanks to favourable weather. Consumption hasn’t altered, while exports are expected to increase due to the higher production. As a top five exporter, Australia’s major markets include China, the US, Indonesia, Japan, Malaysia, South Korea, Taiwan and New Zealand.
With both sugar imports and exports down, it looks like shipping should be keeping its eye on the development of the dry bulk commodity to see whether it as an industry will be affected.