Panamax dry-bulk freight rates for US Gulf to Japan are seen supported in the months ahead on expectations of firm demand for new crops, brokers said on Tuesday.
"The markets are supported by the anticipation that demand on new crops would increase sharply from next month," a Seoul broker said.
US new crops of corn, soybean and wheat, which are currently being harvested, are expected to come to market from September. Some fresh crops from Europe and Australia are also due to seek markets in coming months.
However, brokers said spot freight activity has been thin as some East Asian charterers are holding back from entering into deals, believing Chinese import demand needs to pick up in the short term to support current prices.
However, prices should be supported in the months ahead as importers order new crops, they said.
"There is a strong belief that rates will go up in October and onwards," a broker at a Japanese shipping company said.
The Seoul broker said China's rising wheat imports from Australia, the United States and Europe, would provide support for freight rates.
"Many say there is no reason for the market to fall," he said.
The US Agriculture Department (USDA) has estimated that China will import 3.5 mln tonnes of wheat in 2003/2004, rising to eight million tonnes in 2004/2005.
Key spot Panamax rates were notionally valued around $55 per tonne, little changed from last week.
High oil prices supported freight rates, brokers said. But if high energy prices start to have an economic impact they could pinch freight activity.
"The higher oil prices appear to keep freight rates buoyant, but if this continued and depressed business activities, that would be bad for shipping rates," another Tokyo broker said.