General

The new crown pneumonia epidemic has brought many uncertainties to global transportation and supply chains. Following the rise in container prices, the rise in dry bulk freight rates has now become a new focus of market attention. Dry bulk cargo refers to items that can be handled and transported in bulk, such as grains, iron ore, and coal. Container and dry bulk freight rates are both high. What impact will this have on global prices?

Affected by the epidemic, container freight rates have continued to rise in the past year. Recently, the rapid increase in dry bulk freight has caused concern. S&P Global Platts reported on July 20 that the dry bulk freight for some commodities has been at a high level in 11 years. Its latest weekly report estimates that the freight for sugar from Santos, Brazil to Rizhao, Shandong, China is US$64.5 per ton. This is the highest level since June 11, 2010.

The increase in dry bulk freight is mainly due to the recovery of infrastructure construction, which has increased the demand for transportation of bulk commodities such as iron ore. In addition, some major Asian economies have substantially increased their imports of major agricultural products such as soybeans, wheat, and corn, which has also pushed up international freight rates. A Reuters report in July quoted the shipping industry as saying that the price of grains shipped from Australia to Southeast Asia rose from US$15 per ton last year to US$30, and the price of grain shipped from the Northwest Coast of the United States to Asia rose from US$25 per ton last year. Rise to 55 dollars, more than doubled. In addition, the price of shipping wheat from the Black Sea to Asia has also risen to US$65 per ton from US$35 per ton last year.

The impact of the increase in dry bulk freight rates on the food industry is mainly reflected in the grain commodities, while the increase in container freight rates affects more commercial finished products, as well as fish, meat, fresh fruits, and fresh fruits that are transported in refrigerated containers. Vegetables etc.

S&P Global Platts data shows that the freight for a 40-foot standard container from China to the West Coast of the United States is currently about US$7,400, which is almost five times that of last April.

The increase in freight has pushed up the prices of a variety of foods. The Food and Agriculture Organization of the United Nations Food and Agriculture Organization's food price index fell in June after rising for 12 consecutive months, but the sugar and meat price index still recorded monthly increases.

Previously, consumer giants such as Coca-Cola have announced a round of price increases. Is it possible that the increase in supply chain spending means that more price increases are coming? stay tuned!