27/01/2018 International Maritime Commodity Trade (IMCT) Identify and elaborate on the trends of the international maritime commodity trade for specific commoditiesTheodoropoulos ioannisstudent id athanasiou georgios STUDENT ID maras stylianos STUDENT ID:17209commodity: grain Grain is one of the major commodity that is traded internationally throughsee and is counted to be around (as per 2014 and 2015 data) to 9.
5% of the totaldry bulk trade in the world. According to the same data 430 million tons are tradedper year. From the 430 million ton that are trader every year, 320 million tonsare coarse grain and the rest 110 million tons is soybean (even though soybean isan oilseed, is included in the category of grain products and is one of the grainproducts that has a great demand for transport. In this report we have data forwheat and corn.ProductionIt is important to start our analysis for thiskind of commodity from the beginning of his life, the production.
The topcountries, by volume, which aggregate the highest amount of production are thefollowing: Argentina, Brazil, India, Russia, China, United States and EuropeanUnion. From the table above, we can see that firstcomes India, second China, third EU and follow all the others. It is easy tosay that we expect to see the same countries as the biggest exporters. However,this is not happening. China for example, even though is one of the biggestproduction countries, its production is utilized in local consumption and it isnot exported. There is such high need for grain products in China that not onlythey consume their own production, but they are also the largest importer ofgrain products in the world ExportsThe largest grain exporter is USA, holding ashare of about 25% (as per data of 2014/15 crop year) followed by Europe,Argentina, Ukraine, Russia, Brazil, Canada and Australia. USA is a very strongexporter of coarse grain, holding the leading position in this category withabout 35% of the total worldwide exports, while Europe is the leader exporterof wheat, holding about the 22% of the total exports. On the other hand,Argentina and Brazil are the major exporters of soybean, with both having ashare of more than 65% of the world exports of soybean.
In the table below, we can see that the mainexporters of grain, for the last decade, are Argentina, Brazil, Canada,European Union, Russia, Ukraine and United States. It is important to mentionthat, the country with the most stable exporting power all the years, areUnited States. In contrast Russia exported large amounts the previous years, especially in 2009-2010 where skyrocket, but asthe year passes has significantly reduce the exports. Furthermore, Brazil hasincreased his exporting power year by year with only break in 2015-2016. ImportsAccording to the records the largest importersof grain products in the world are Japan, South Korea, Egypt and Europe. Thecountries from the east, like South Korea and Japan they prefer to importgrains from Australia, Canada (the west side), United States and from thesouthwest countries such as Brazil and Argentina. The most common type ofvessels they use is Supramax or Panamax.
This is due to the long distances inrelation with the high quantities that they import. Not so often Capesize andsome Handies are used for routes to Australia and West Coast Canada.The north African countries (e.g. Egypt andAlgeria) are focusing to import grain products from Ukraine, Russia and fromFrance and United States sometimes. This kind of trade is usually performedwith Handies or Supramaxes.
On the otherhand, Europe mainly import from Ukraine and Russia and other EuropeanCountries. However, some quantities coming from United States and Canada. Handiesand Supramaxes are the main type of vessel which is used also in this area. From the map below, we can see how the mainroutes for the grain products are illustrated. As we notice point C (NewOrleans, Mississippi and US Gulf ports) is a very important spot because supplya lot of regions like East Asia, South Africa, Europe (South and East) andSouth America. Australia, as we mention before, supply also East Asia and EastAfrica. One additional supply for the East Asia is coming from the SouthAmerica (Argentina, Uruguay and Paraguay). However, we must mention here thatthis route, as we can see from the map, is the longest between all theothers and maybe it has increased riskiness because the route (which passingfrom the Cape of Good Hope, Singapore and Malaysia).
Factors that influencegrain products tradeClimaticFactors: For agricultural products, like grain, weather is a very importantfact. For example, a period full in rainfalls means that the farms will producebetter quality agricultural products and larger quantities which will exported.This means that international trade will flourish, and bulk carriers will havecargo to transport from country to country. However, in a drought period farmssuffer as a result there will not be enough supply and not a lot quantity toexport. That means also that one country which is one of the biggest exporters maybewill need to import in order to fulfil his consumption.Price of crudeoil: The movement in price of crude oil could be a factor that can affect the tradeof agricultural products.
It is known that if the price of crude oil is increasingthen the transportation of grain by ships for example will be much more expensive.Soon the countries which import will reduce the importing quantities and exportingcountries will stocked up with extra agricultural products. The extra product willbe destroyed, and the damage will be huge (for the exporting country and for thefarmers too).
Politicalinstability or the threat of it: Any kind of this threat can be a sharp declinein trade of grain. For example, the embargo that many countries put against Russiathe previous years. As we mention before Russia is one of the biggest exporters,a move like this it is enough to make the trade to flourish or not.