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Maritime Commodity Trade (IMCT)

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Identify and elaborate on the trends of the
international maritime commodity trade for specific commodities


student id
athanasiou georgios
maras stylianos

commodity: grain

Grain is one of the major commodity that is traded internationally through
see and is counted to be around (as per 2014 and 2015 data) to 9.5% of the total
dry bulk trade in the world. According to the same data 430 million tons are traded
per year. From the 430 million ton that are trader every year, 320 million tons
are coarse grain and the rest 110 million tons is soybean (even though soybean is
an oilseed, is included in the category of grain products and is one of the grain
products that has a great demand for transport. In this report we have data for
wheat and corn.


It is important to start our analysis for this
kind of commodity from the beginning of his life, the production. The top
countries, by volume, which aggregate the highest amount of production are the
following: Argentina, Brazil, India, Russia, China, United States and European












From the table above, we can see that first
comes India, second China, third EU and follow all the others. It is easy to
say 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 biggest
production countries, its production is utilized in local consumption and it is
not exported. There is such high need for grain products in China that not only
they consume their own production, but they are also the largest importer of
grain products in the world


The largest grain exporter is USA, holding a
share 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 strong
exporter of coarse grain, holding the leading position in this category with
about 35% of the total worldwide exports, while Europe is the leader exporter
of 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 a
share of more than 65% of the world exports of soybean.  In the table below, we can see that the main
exporters of grain, for the last decade, are Argentina, Brazil, Canada,
European Union, Russia, Ukraine and United States. It is important to mention
that, the country with the most stable exporting power all the years, are
United States. In contrast Russia exported large amounts the previous years, especially in 2009-2010 where skyrocket, but as
the year passes has significantly reduce the exports. Furthermore, Brazil has
increased his exporting power year by year with only break in 2015-2016.



According to the records the largest importers
of grain products in the world are Japan, South Korea, Egypt and Europe. The
countries from the east, like South Korea and Japan they prefer to import
grains from Australia, Canada (the west side), United States and from the
southwest countries such as Brazil and Argentina. The most common type of
vessels they use is Supramax or Panamax. This is due to the long distances in
relation with the high quantities that they import. Not so often Capesize and
some Handies are used for routes to Australia and West Coast Canada.

The north African countries (e.g. Egypt and
Algeria) are focusing to import grain products from Ukraine, Russia and from
France and United States sometimes. This kind of trade is usually performed
with Handies or Supramaxes.  On the other
hand, Europe mainly import from Ukraine and Russia and other European
Countries. However, some quantities coming from United States and Canada. Handies
and Supramaxes are the main type of vessel which is used also in this area.

From the map below, we can see how the main
routes for the grain products are illustrated. As we notice point C (New
Orleans, Mississippi and US Gulf ports) is a very important spot because supply
a lot of regions like East Asia, South Africa, Europe (South and East) and
South America. Australia, as we mention before, supply also East Asia and East
Africa. One additional supply for the East Asia is coming from the South
America (Argentina, Uruguay and Paraguay). However, we must mention here that
this route, as we can see from the map, is the longest between all the
others and maybe it has increased riskiness because the route (which passing
from the Cape of Good Hope, Singapore and Malaysia).









Factors that influence
grain products trade

Factors: For agricultural products, like grain, weather is a very important
fact. For example, a period full in rainfalls means that the farms will produce
better quality agricultural products and larger quantities which will exported.
This means that international trade will flourish, and bulk carriers will have
cargo to transport from country to country. However, in a drought period farms
suffer as a result there will not be enough supply and not a lot quantity to
export. That means also that one country which is one of the biggest exporters maybe
will need to import in order to fulfil his consumption.

Price of crude
oil: The movement in price of crude oil could be a factor that can affect the trade
of agricultural products. It is known that if the price of crude oil is increasing
then the transportation of grain by ships for example will be much more expensive.
Soon the countries which import will reduce the importing quantities and exporting
countries will stocked up with extra agricultural products. The extra product will
be destroyed, and the damage will be huge (for the exporting country and for the
farmers too).

instability or the threat of it: Any kind of this threat can be a sharp decline
in trade of grain. For example, the embargo that many countries put against Russia
the 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.




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