Baltic Dry Index at three-month lows

Demand for ocean freight seen backing off

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Published: July 12, 2022

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File photo of barley being loaded for export at the Black Sea port of Mykolaiv, Ukraine on July 9, 2013. (Photo: Reuters/Vincent Mundy)

MarketsFarm — Ocean freight rates have come under pressure over the past month as demand for freight backs away, which could be seen as a sign of the slowing global economy.

The Baltic Dry Index (BDI), which is a major indicator of shipping rates, settled at 2,081 points on Monday, up 14 points from Friday’s close but near the lowest levels in three months.

The index has lost roughly 1,300 points over the past six weeks, although it still well above the lows of the calendar year near hit in January.

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. It is often seen as a leading indicator of global economic activity.

Canada is at a freight disadvantage compared to its competitors exporting grains and oilseeds into many markets, with higher freight rates heightening that disadvantage.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

About the author

Phil Franz-Warkentin

Phil Franz-Warkentin

Editor - Daily News

Phil Franz-Warkentin grew up on an acreage in southern Manitoba and has reported on agriculture for over 20 years. Based in Winnipeg, his writing has appeared in publications across Canada and internationally. Phil is a trusted voice on the Prairie radio waves providing daily futures market updates. In his spare time, Phil enjoys playing music and making art.

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