May 17, 2007

Jordan purchases 100,000 tonnes of feed barley via tender

Importers from Jordan have bought 100,000 tonnes of feed barley through a tender for the same amount that closed on Wednesday, European traders said.

The imports were said to be US$259.50 a tonne C&F (Cost and freight) for 50,000 tonnes for shipment in the first half of June and US$253 a tonne C&F for 50,000 tonnes in the second half of June.

The origin of the 50,000 tonnes for first half June shipment was said to be optional as Russian barley was said to have been sold for second half June shipment.

In its last international barley purchase on January 31, Jordan bought 100,000 tonnes at US$238 a tonne C&F.

Since then international shipping costs have increased sharply.

According to a trader, the present purchase has cost about US$1.8 million more than the January deal for the same volume of grain, substantially because of the amazing rise in bulk carrier costs.  The traded added the rise in the Baltic Exchange is "really hitting importers hard."

The Baltic Exchange's Panamax freight index for bulk carriers to transport grains and metal ores closed at 6,330 points on Tuesday, above its previous 6,110 point all-time high in 2004 and up from around 4,000 points in January this year.

The soaring shipping costs have made grains import for Middle Eastern countries considerably more expensive and several have delayed tenders.

On April 25, Jordan rejected all bids as too high in previous barley tender and its successive barley tenders.

Shipping prices have risen because of continuing strong global commodity demand, especially from China.