BMTI Dry Bulk Commodity Update (31 Aug 2021)

Euro wheat crop predictions continue to be downgraded amid changing weather patterns. Wheat produced in France, Europe’s biggest producer, is now expected to decline to 34.93Mt in the 2021-22 marketing year, according to Agritel, which lowered its prior forecast by some 3 Mt. The agricultural consultant says that persistent and unfavourably wet weather in late summer has threatened to curb output for the current marketing year. While this would still exceed the previous year’s output of 29.2 Mt, it lies under the ten-year average for French wheat.

Belarus potash producers were concerned about being able to export their product after the US, UK and Canada imposed sanctions on the Belarus government on 9 August. But it appears that shipments will still be possible in Europe as sanctions from the UK and EU do not affect the country’s largest export category for potash, namely MOP with potassium content of 40-62%, which is not covered by the new export sanctions. Nonetheless, given that most of Belarus’ potash exports are currently routed via (EU member) Lithuania, there are some concerns about a stoppage developing there. Indeed, Lithuanian transport minister Marius Skuodis recently said starting in December US sanctions would be imposed due to global bank transactions and effectively stop Belarusian fertilizer passing through Lithuania. But he later clarified his statement as to being limited to commercial banks and their own imposition of US sanctions. As long as payments are still allowed—which officials at BPC and other producers say they should be—Belarus potash transhipment via rail to Klaipeda is expected to continue unimpeded in December.

Turkish import prices for scrap metal remain under pressure with recent sales of Baltic-sourced material indicating notable declines from previous numbers. The shipment of HMS 1/2 80:20 scrap was sold (ex-Baltic Sea) at around US$ 450.50/mt CFR Marmara or US$ 0.5/mt lower than last-done. The short sea scrap has been flat at US$ 422.50/mt CIF Turkey.

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