Issue 1 - American Palm Oil Council

Soft oils freightsThe situation has been the same in thesoft oils trade. For example, the rate for25,000-30,000 tonnes of soybean oilfrom South America to China wasUS$49/tonne at the end of 2006; itjumped to US$77/tonne last March butdropped to around US$60/tonne at theend of 2007.This pattern was followed on almost allthe other routes.The rates jumped in thefirst months of 2007 but then droppedoff, the difference for palm oil being thatthe rate remained higher than at the endof 2006.What about 2008? I would expect therates to remain fairly stable and even toease off a little, but next year will be moreinteresting.If the freights for petroleum productsincrease, there may well be a rush tocharter the double hull IMO3-classproduct tankers now carrying vegetableoils.That is what they were ordered forin the first place – to replace themultitude of single hull ships. They willtrade where the money is, but vegetableoil charterers would be well advised tosecure tonnage into 2010 when the newrules take effect.Predicting freight levels is a gamble. Themajor established chemical tankeroperators have got it right. They havefleets of both old (written down) shipsand new ships; they are constantlyrenewing their fleets and selling shipswhen these get old, but not tocompetitors. They sell and charter backuntil the ship is ready for the scrap yard.On top of this, they are chartering inships both in the short- and long-term sothey can always meet commitments andyet get rid of short-term ships if themarket turns down. Their size enablesthem to do this. For their loyal charterers,they are always there in good times andbad.Charles BartonMaritime ConsultantGLOBAL OILS & FATS BUSINESS MAGAZINE • VOL.5 ISSUE 1, 200823