Palm & Veg Report, September 2018

The US-China muscle flexing trade war and continued political uncertainty is still disrupting the global trading environment and most shipping markets, with the exception of dry bulk, are still facing a major headwind. The currency markets also fell last month amid fears of contagion over Turkey which hasn’t helped. The good news is that someone far cleverer than us, from one of the larger ship broking firms starting with a ‘C’ remains confident that activity will increase and that higher freights will prevail, unfortunately what they failed to say is when! We share the more commonly held view that the CPP and Chemical markets are not going to change anytime soon but we do think the forth quarter of this year will yield increased activity for the edible markets as this is the time of the year when they tend to improve.

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James Woolfson
Palm & Veg Report, August 2018

Clean petroleum markets spiked during the middle of last month East of Suez which added some much needed spice to an otherwise bland market. In direct contrast clean earnings West of Suez are worse than awful at the moment. Not surprisingly business in virtually every other sector of the shipping markets has been slow and uninspiring over the last month, leaving us all feeling a little bit like mice in a gas filled maze without an exit! There is little to indicate that shipping fortunes will turn around before the 4th quarter of this year at the earliest and some people appear to have already written off 2018 as another year to forget!

Crude oil prices dropped by more than 4 % in a day during the middle of last month as Saudi Arabia increased its exports to Asia and headlines suggested that the US could also add to the global supply and tap into strategic reserves to stabilize markets when sanctions on Iran come back in to force later this year. This news appears to have reversed the upward trend in bunker prices which will come as welcomed news to ship owners.

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James Woolfson
Palm & Veg Report, July 2018

It’s mid summer and guess what? Global freight markets like many of the top world cup football teams this year, except for England of course, have gone to hell in a handbag! The major difference this year compared with previous years is that fuel prices are continuing to rise and freight rates are struggling to keep up, which has created the worst possible combination if you are a ship owner/operator. Trading activity has also been fairly lacklustre in virtually all of the edible oil markets making it just as challenging for those trying to make a living on the other side of the fence.

Some longer term encouraging news for the trade is that rising demand and stagnating domestic production is expected to boost India’s vegetable oil imports to 25 million tonnes by 2030, from 15.5 million tonnes in 2017, the problem is most of us will be long gone before this takes off!

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James Woolfson
Palm & Veg Report, June 2018

Global edible oil markets are still failing to ignite at the moment especially in South America where the soya bean oil markets have been as quiet as a Tesla engine for months now and if it wasn’t for all the annoying GDPR messages clogging up our inbox we would probably be sitting here wondering what to read! The palm oil markets were a trifle busier compared to the month earlier although spot freight rates are still flat lining and markets have so far failed to react to the rapid up-tick in crude oil (bunker) prices which tipped 460 per tonne in Singapore on the 23rd of May. Chemicals and UCO/Biofuel exports from Asia to Europe have been steady but global chemical markets remain very anaemic and most people in this sector are already prepared for a challenging summer. Fresh rumours are circulating again that PFAD will be declassified as a waste product and how this will impact trade flows to Europe in the future will be very interesting to follow.

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James Woolfson
Palm & Veg Report, May 2018

It won’t come as a major surprise to hear that the edible oil freight markets are materially the same was they were last month and hindsight is the only exact science we can offer you at the moment on where these crazy markets are heading! The liquid oil markets are painfully slow in the Western Hemisphere and the tropical oil markets East of Suez have been very stop-start this month. The East and Western CPP markets are charting in a completely opposite direction to one another as the Atlantic basket, which had dipped to as low as 5,700 per day a month ago is now averaging US$ 11,175 per day and in the Far East, the Pacific basket is now averaging US$ 8,000 per day compared with US$ 12,000 a month ago.

Crude oil hit its highest price level in three and a half years on the 18th of April due to a supply squeeze and it has continued to edge higher ever since and some forecasters believe that crude values could possibly rise by another 15 % this year. Whilst we know from past experience that this doesn’t always influence spot freight rates in the short term, as it takes a basket of other factors to do that, however, we think it is only a matter of time before it does.

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James Woolfson
Palm & Veg Report, April 2018

Freight markets are feeling rather twitchy at the moment especially out in Asia where activity, particularly tropical oils, has been somewhat muted. That said a couple of punchy time charter trip fixtures were concluded this week at increased levels over last done. If past years have any bearing on the future then we do expect the next quarter to be challenging as this is the time of the year when activity has a tendency to dip out in Asia. The escalating trade stand off intensifying between America and China has been hugely unsettling and this is now weighing heavily on all the major commodity markets around the world at the moment. Combine this with the overcapacity of tonnage, not only in the MR sector of the markets, but in the stainless steel sector also where another 156 NB’s are still on the order books between now and 2020, it’s no wonder some people think we are facing further headwinds.

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James Woolfson
Palm & Veg Report, March 2018

Most markets have been driving along at a reasonable pace although it has felt at times as if the hand brake may have been left half on in some areas! A couple of owners reported better than expected activity in the West but the markets out in Asia have been a little dreary, partly due to the Chinese New Year festivities which may have temporarily paralysed any new business done. Having said that we witnessed an explosion of sulphuric acid fixtures from Asia and India to Brazil, Europe and South America last month and this took out more than a handful of stainless steel vessels from the Asian markets.

The POC conference in KL didn’t throw up anything particularly noteworthy from a shipper perspective but overall the mood was noticeably more up beat this year compared to last year so that’s a plus. It’s too early to know how much of this renewed optimism will translate into better returns for the industry as we move forward but hopefully the second and third quarters of 2018 will at the very least outperform the second and third quarters of 2017 as they were positively awful.

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3B Digital
Palm & Veg Report, February 2018

A New Year carries new challenges and this year is proving to be no different from many others. The one difference is that improved economic growth in the United States combined with a 4% rise in global GDP this year is very positive but how much of this encouraging economic data will translate into dollars and cents for our struggling industry remains the big unknown. CPP markets rallied last month but soon fizzled out last week and these markets will continue to influence edible rates in 2018. We shouldn't forget that the Stone Age didn't end because we ran out of stone, and the oil age won't end before the world runs out of oil, however fears about climate change and pollution is forcing governments to find alternative solutions to our energy demands.

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3B Digital
Palm & Veg Report, January 2018

This time last year we voiced concerns about the year ahead because the outlook was properly bleak. Well "hey presto" most shipping markets did exactly as we predicted they would, they massively underperformed especially during the first six months of the year! Thankfully a number of markets did manage to perk up during the last quarter of the year, palm in particular, and some of this momentum has even been carried into the New Year. Sadly many other markets are still floundering leaving us with somewhat mixed emotions about how 2018 will unfold. The optimist amongst us believe that 2018 will be a better year than last year and it looks highly unlikely that markets will decline to the lows we witnessed in the second quarter of 2017 but the realists in us also know that it will be a hard slog. So try and remain optimistic and let's focus on the challenges that lie ahead and try and help, not hinder each other, during the next 12 months.

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3B Digital
Palm & Veg Report, December 2017

Global shipping markets perked up in November and against the odds some trade routes have outperformed earlier predictions. So with a little bit of luck, we will finish the year on a high. Exports from South America have been extremely slow of late, so that market remains depressed. However on a more upbeat note we are continuing to see measured improvements in many other parts of the world, including some of those lack lustre CPP trades where average earnings have been perking up quite a bit.

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3B Digital
Palm & Veg Report, November 2017

The two most commonly used words in the shipping market at the moment are 'let's hope'.

Global freight markets are broadly unchanged from a month ago; miserable in the West, better in the East. A numbers of owners, particularly those operating in the dry and chemical tanker sectors are a little more optimistic about the future, although the spot markets are still littered with landmines. Improvements in global trade growth, firming freight rates, especially in the dry bulk sectors, and a reduced order book seem to be raising confidence across the industry as a whole. The million dollar question is when can the industry convert some of this renewed optimist into results?

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3B Digital
Palm & Veg Report, October 2017

There has been an abundance of bad news for most of 2017, and we know that bad news often sells better than good news but for change we are pleased to be able to report some good news especially on some of the markets East of Suez. CPP shipments from the AG were recently described as spicy, tropical oil shipments have been bursting with activity across all sectors and we have even seen an up tick in the chemical markets in Asia, partly attributed to the recent weather disruptions in the US Gulf. Unfortunately the CPP markets in the Atlantic are currently averaging US$ 5/6,000 dollar p/d so those markets are continuing to flounder and the phosphoric acid flows from North Africa to India have been heavily disrupted recently. We would be lying if we said the chemical and edible oil markets in the West have been strong because they have certainly not been very exciting but certain sectors have been described as 'better than expected'.

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3B Digital