Brazil's Panamax Bulk Trade Slipping

bulk carrier

By MarEx 2017-02-07 18:27:55

Shipping analyst VesselsValue says Australian and U.S. Panamax bulk trade is catching up to the top, but slipping, Brazil to China trade. 

The evolution of the top five trade routes for Panamax bulkers can be measured through the billons of ton miles (laden distance travelled multiplied by the amount of cargo carried for every vessel in the fleet) moved from country to country over time.

The fourth quarter of 2016 saw a continuation of the reduction of ton miles on the Brazil to China route, with increases on the Australia and U.S. to China routes.

The Panamax bulker trade is mainly a grains trade, especially soybeans, and is very volatile. Previously, it has been dominated by vessels moving cargos from Brazil to China. However this route has been on a downtrend from a peak during the last quarter 2015, says VesselsValue.

The main soybean export competitor to Brazil is the U.S. This route peaked in 2014 to 2015 when the U.S. had better than normal harvest, which led to lower U.S. export prices and increased sales to China. Meanwhile, Brazil’s soybean crop that season developed slower due to weather incidents, and the U.S. “poached” Brazil’s exports to China.