Slow growth in grain trade - BULK CARRIER TRADE & FLEET OUTLOOK - July 2011

Import demand for dry bulk commodities in many countries is well supported and volumes are rising in a wide range of trades. But the pace of expansion has slackened after the sharp 10% rebound seen last year. Some forecasts suggest that global seaborne trade growth in 2011 could be around half of the rate seen in the previous twelve months.
GRAIN
Currently there are no signs of dramatic changes in world grain import demand over the next twelve months. International Grains Council calculations show global trade in wheat plus corn and other coarse grains increasing marginally by 1% in crop year 2011/12 now starting. From 240.4mt (million tonnes) in the previous year, the total is forecast to rise to 243.6mt (see table 1).
Among positive elements, imports into North Africa could be about 4% higher at 38.0mt because of domestic production shortfalls in some countries. Middle East imports may increase by 3% to 37.7mt for similar reasons. China’s relatively limited wheat and coarse grains purchases are expected to jump by 13%, reaching 6.1mt. Much larger imports into Europe also could emerge, after dry weather adversely affected domestic crops in recent months.
A recent forecast by Abares emphasizes expectations of slowing growth in iron ore trade. After last year’s very strong 9% expansion, global iron ore trade (including land movements, but mostly seaborne) is estimated to grow by 35mt or 3.4% in 2011, reaching 1071mt.
Among key features, Japan’s iron ore imports are expected to be flat this year at 133mt, strengthening in the second half following a slackening in the past few months
resulting from the earthquake and tsunami. Elsewhere prospects are more favourable. The EU’s 2011 imports are forecast to increase by 9%, to 145mt, while in China resumed growth to 642mt is envisaged, a 3% upturn. Expansion in South Korea could raise the annual total by 8% to 57mt.
Prospects for world coal trade are also positive, but it seems unlikely that the remarkable 13% growth rate achieved in 2010 will be repeated this year. Earlier predictions of another surge in China’s requirements during 2011 have been revised downwards, amid evidence suggesting moderating imports, although recent activity pointed to regained momentum in the months ahead.
Asian countries are still seen as the main drivers of the upwards trend in global seaborne coal trade. The outlook for steam coal import demand seems bright. India’s purchases this year are expected to continue rising very rapidly, as power station consumption expansion exceeds domestic coal output growth. Europe’s imports also may be higher amid declining domestic coal production and increased coal-fired electricity generation.
As an example of seaborne trade in minor bulks related to industrial processes, shipments of nickel ore have become much more prominent over the past few years. China has emerged as the dominant importer, reportedly buying about 25mt in 2010, while other countries also import sizeable quantities. Further growth in this trade seems likely.
Handysize bulk carriers are widely employed in minor bulk and other trades. Growth of the world fleet in this size group (10–39,999dwt) resumed strongly last year at an 8% rate, as shown by table 2.