MarketsFarm — Ocean freight rates have moved steadily higher over the past month, nearing some of their highest levels of the past year.
The Baltic Dry Index (BDI), a major indicator of shipping rates, has moved higher most of the past month, settling above 2,000 points for the first time in five months on Tuesday, at 2,017 points. That’s up about 700 points since the beginning of February and roughly triple the level seen at the same time a year ago.
The BDI is compiled by the London-based Baltic Exchange and provides an assessment of the price of moving major raw materials by sea. The overall BDI includes sub-sectors for the different classes of ocean vessels — including capesize, panamax and supramax.
Improving global economic optimism, as vaccination programs pick up speed around the world, contributed to the recent strength in freight rates, according to analysts.
Canada is at a freight disadvantage compared to its competitors into some markets, and higher freight rates can heighten that disadvantage.
However, Canadian grain exports continue to move at a solid pace, with total bulk exports of the major grains and oilseeds, through Week 31 of the 2020-21 crop year, at 33 million tonnes, running 34 per cent ahead of the previous year’s pace, according to Canadian Grain Commission data.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.