MarketsFarm — Ocean freight rates have fallen off of their highs of the past year over the course of the past month, but remain well above the lows hit in the spring when global markets first started reacting to the COVID-19 pandemic.
The Baltic Dry Index (BDI), a major indicator of shipping rates, has moved lower for most of October and into November, hitting 1,194 points on Thursday. That compares with the yearly high of 2,097 points on Oct. 6 and the low of 393 points hit in mid-May.
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.
Freight analysts cited declining demand from China as the main reason behind the softer freight rates.
Canada is at a freight disadvantage compared to its competitors into some markets, and lower rates help lessen that disadvantage.
Grain exports continue to move at a solid pace, with total exports of the major grains and oilseeds during the first 12 weeks of the 2020-21 crop year of 12.2 million tonnes running well ahead of the 9.5 million tonnes shipped during the same time frame the previous year, according to Canadian Grain Commission data.