GRAINS trades have been supporting the smaller-sized bulk carriers amid the coronavirus outbreak.

While some ports have imposed restrictions on imports and exports with inland transportation issues, there has not been any meaningful reductions in volumes traded so far, said Danish grains consultancy BullPositions. 

"Based on China’s resilient agricultural trade flows, I expect something similar in all other areas," its managing director Jesper Buhl said. "We still have to eat and feed our livestock and the continued flow of agricultural goods is a priority for all nations throughout this corona pandemic."

This view is his short-term take as soyabeans, wheat and corn trades show resilience and exports from major centres have exceeded seasonal averages.

Exports of grains and oilseeds from major producing centres reached 63m tonnes in January and February, according to BullPositions. That is up to 6m tonnes higher than the average seen over the past five years.

"With export growth eventually translated into imports growth, there is no sign of any corona-induced shipping activity slowdown or agricultural demand decline," Mr Buhl said.

Chinese demand for Brazilian soybeans has been seasonally strong throughout the current corona crisis and Ukrainian corn exports to China and other countries continue at peak levels, he said, adding that he expects a boost in Atlantic basin export activity into May. 

However, in the long-term, should there be a greater reliance on national agri-production self-sufficiency, turning away from global trade flows, this would have a "major negative consequence for shipping," he ventured.    

Panamaxes, supramaxes and handysize bulk carriers have been earning substantially higher rates than the capesize market, which relies on iron ore and coal trades, hard hit by the slowdown in industrial activity in China and elsewhere.

The average weighted panamax time-charter on the Baltic Exchange settled Wednesday at $7,975 per day, up from $5,163 at the end of January, while supramaxes have seen a 44% rise to $8,304 per day. Handysizes meanwhile are at $7,464 versus $5,979.  

Shipping association BIMCO said that seasonally higher grain exports from South America had resulted in the smaller bulker segments seeing profitable figures, although the risks associated with the virus were skewed to the downside.   

"While seasonally strong grain exports could provide for a temporary lift in freight rates, it is ever worth addressing the elephant in the room: structural overcapacity," its chief shipping analyst Peter Sand said.

The panamax, supramax and handysize fleet grew by a "challenging" 4.5% through 2019, and with a further 25m dwt on order, it is unlikely that the fleet will return to a strong balance between supply and demand anytime soon, he added.