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This week, attention is drawn to the Russian grain sector and the notable recovery in shipments that began in June, culminating in a recent peak in September. It is particularly noteworthy that the quarterly volume shipped to all destinations has reached its highest levels for the year, surpassing figures from the same quarters in previous years since 2021.
Russia plays a pivotal role as a supplier of wheat to Egypt, which holds the title of the world's largest wheat importer. The Egyptian economy relies heavily on Russian grain, particularly wheat, to satisfy its domestic demand. Over the years, Russia's share of Egypt's wheat imports has been substantial, and this relationship has only strengthened in recent times due to the relatively low cost and high availability of Russian grain.
The Egyptian General Authority for Supply Commodities (GASC) consistently engages in tenders to purchase large quantities of wheat from Russia, ensuring a steady flow of this critical commodity. In 2023, despite facing logistical challenges stemming from international sanctions, Egypt managed to secure substantial wheat supplies from Russia. This resilience speaks to the adaptability of both countries in maintaining their trade relationship under challenging circumstances.
This week, the focus is particularly on the Russian grain sector and the remarkable recovery in shipments that began in June, culminating in a recent peak in September. Notably, the quarterly volume of grain shipped to all destinations has reached its highest levels for the year, surpassing figures from the same quarters in previous years since 2021. This surge is indicative of Russia's ability to navigate supply chain disruptions and fulfil international demand.
For the current year, Egypt has emerged as the primary destination for Russian grain, accounting for 20% of the total volume shipped—up from a 15% share last year. In contrast, Turkey was the leading recipient in 2022, also with a 15% share. This shift in trade dynamics underscores evolving demand patterns and may reflect geopolitical influences that are reshaping regional grain distribution networks.
As Russia ramps up its grain exports, industry stakeholders are closely monitoring these trends to evaluate their broader implications for global grain markets, food security, and pricing dynamics. The potential impact of increased reliance on Russian wheat for countries like Egypt raises important questions about the sustainability of such dependencies, especially in the face of geopolitical tensions.
Furthermore, as Egypt continues to depend on Russian grain to meet its domestic needs, the situation highlights the need for diversifying sources to enhance food security. Should disruptions occur in the future, it could significantly affect Egypt’s ability to maintain stable wheat supplies, prompting discussions about alternative suppliers and strategies to mitigate risks. Overall, the evolving landscape of Russian grain exports is crucial not only for Egypt but for global food markets as well.
Meanwhile, the outlook for earnings in the iron ore market, particularly for the large Capesize vessel segment, remains uncertain due to a fragile steel market and slow economic growth in China. Iron ore futures extended their losses for a second consecutive session on Wednesday, as a lacklustre global steel market outlook and soft forecasts for China’s economic recovery overshadowed the latest stimulus measures announced by the top consumer. The most actively traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) closed the morning session down 1.91%, settling at 746.0 yuan ($104.60) per metric ton. Similarly, the benchmark November iron ore price on the Singapore Exchange fell 2.0% to $98.60 per ton as of 0702 GMT. Data from the World Steel Association revealed that global crude steel production in September decreased by 4.7% year-on-year, totaling 143.6 million tons. Notably, China’s output dropped by 6.1%, amounting to 77.1 million tons, highlighting ongoing challenges in the steel industry and the impact on iron ore demand.
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Creating a sustainable world requires us to embark on a journey towards a zero emission future, where every step is a commitment to preserve our planet for future generations.
Albert Greenway
Environmental Scientist, Sustainability Expert
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Increased Use of Renewable Energy:
Shipping companies are embracing renewable energy sources to power onboard systems and reduce emissions during port operations. Solar panels and wind turbines are being installed on vessels to generate clean energy, reducing reliance on auxiliary engines, and cutting down emissions. Shore power facilities in ports allow ships to connect to the electrical grid, eliminating the need for onboard generators while docked.
Collaboration and Industry Partnerships:
Recognizing that addressing emissions requires collective action, shipping companies, governments, and organizations have formed partnerships and collaborations. These initiatives focus on research and development, sharing best practices, and promoting knowledge transfer. Joint projects aim to develop and deploy innovative technologies, improve infrastructure, and create a supportive regulatory framework to accelerate the industry's transition towards a greener future. The Zero Emission Shipping - Mission Innovation.
To pave the way for a greener future in shipping, the availability of alternative fuels plays a vital role in their widespread adoption. However, this availability is influenced by factors such as port infrastructure, local regulations, and government policies. As the demand for cleaner fuels in shipping rises and environmental regulations become more stringent, efforts are underway to improve the accessibility of these fuels through infrastructure development, collaborations, and investments in production facilities.
Liquefied Natural Gas (LNG) infrastructure has seen significant growth in recent years, resulting in more LNG bunkering facilities and LNG-powered vessels. Nonetheless, the availability of LNG as a marine fuel can still vary depending on the region. To ensure consistent availability worldwide, there is a need for further development of LNG supply chains and infrastructure. For biofuels, their availability hinges on production capacity and the availability of feedstock. Although biofuels are being produced and utilized in various sectors, their availability as a marine fuel remains limited. Scaling up biofuel production and establishing robust supply chains are imperative to ensure wider availability within the shipping industry.Hydrogen, as a fuel for maritime applications, is still in the early stages of infrastructure development. While some hydrogen vessels have been tested or introduced in the first quarter of last year, the infrastructure required for hydrogen production and distribution needs further advancement.
Ammonia, as a marine fuel, currently faces limitations in availability. The production, storage, and handling infrastructure for ammonia need further development to support its widespread use in the shipping industry.Methanol, on the other hand, is already a commercially available fuel and has been used as a blend with conventional fuels in some ships. However, its availability as a standalone marine fuel can still be limited in certain regions. Bureau Veritas in October 2022 published a White Paper for the Alternative Fuels Outlook. This white paper provides a comprehensive overview of alternative fuels for the shipping industry, taking into account key factors such as technological maturity, availability, safety, emissions, and regulations.
Creating a sustainable world requires us to embark on a journey towards a zero emission future, where every step is a commitment to preserve our planet for future generations.
Albert Greenway
Environmental Scientist, Sustainability Expert
Increased Use of Renewable Energy:
Shipping companies are embracing renewable energy sources to power onboard systems and reduce emissions during port operations. Solar panels and wind turbines are being installed on vessels to generate clean energy, reducing reliance on auxiliary engines, and cutting down emissions. Shore power facilities in ports allow ships to connect to the electrical grid, eliminating the need for onboard generators while docked.
Collaboration and Industry Partnerships:
Recognizing that addressing emissions requires collective action, shipping companies, governments, and organizations have formed partnerships and collaborations. These initiatives focus on research and development, sharing best practices, and promoting knowledge transfer. Joint projects aim to develop and deploy innovative technologies, improve infrastructure, and create a supportive regulatory framework to accelerate the industry's transition towards a greener future. The Zero Emission Shipping - Mission Innovation.
To pave the way for a greener future in shipping, the availability of alternative fuels plays a vital role in their widespread adoption. However, this availability is influenced by factors such as port infrastructure, local regulations, and government policies. As the demand for cleaner fuels in shipping rises and environmental regulations become more stringent, efforts are underway to improve the accessibility of these fuels through infrastructure development, collaborations, and investments in production facilities.
Liquefied Natural Gas (LNG) infrastructure has seen significant growth in recent years, resulting in more LNG bunkering facilities and LNG-powered vessels. Nonetheless, the availability of LNG as a marine fuel can still vary depending on the region. To ensure consistent availability worldwide, there is a need for further development of LNG supply chains and infrastructure. For biofuels, their availability hinges on production capacity and the availability of feedstock. Although biofuels are being produced and utilized in various sectors, their availability as a marine fuel remains limited. Scaling up biofuel production and establishing robust supply chains are imperative to ensure wider availability within the shipping industry.Hydrogen, as a fuel for maritime applications, is still in the early stages of infrastructure development. While some hydrogen vessels have been tested or introduced in the first quarter of last year, the infrastructure required for hydrogen production and distribution needs further advancement.
Ammonia, as a marine fuel, currently faces limitations in availability. The production, storage, and handling infrastructure for ammonia need further development to support its widespread use in the shipping industry.Methanol, on the other hand, is already a commercially available fuel and has been used as a blend with conventional fuels in some ships. However, its availability as a standalone marine fuel can still be limited in certain regions. Bureau Veritas in October 2022 published a White Paper for the Alternative Fuels Outlook. This white paper provides a comprehensive overview of alternative fuels for the shipping industry, taking into account key factors such as technological maturity, availability, safety, emissions, and regulations.
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