Posted 9/15/2021 07:46 (#9221154 - in reply to #9220882) Subject: RE: China takes 6 cargos of Brazilian beans
In order to answer you question with the correct context, one has to understand the verbiage, the NGFA trade rules, the ocean freight market, The NAEGA rules, optional origin contracts and etc when trying to understand or put a value on why “someone” took the action we read about on the internet. The shipping market and the “rules” which are incorporated into the shipping contracts and then incorporated to various degrees in the grain contract are very precise …..shipping contracts are about attention to detail.
Reading a story on the web or getting a morning email from a a guy who knows a guy who told him a secret generally leaves the reader with the absence of context. This invites making decisions with imperfect information….similar to what the media and government prefer for the people’s paying the taxes.
One cannot correctly use the word “diversion” in the shipping industry unless he knows the terms of the trade. Again, it’s the mindset of knowing “the rest of the story”……Far less interesting than saying “because of high ocean freight rates and loading lineup uncertainties ABC grain company is exercising its contract to place the ship a previously contracted optional origin”….The second a good trader sees big cloud over the ocean in Sept, he adds optional origin clause..
There is a lot of good information and observations in this thread…Second level thinking.
Lastly….When time chartering ships one is not immune from demurrage. In grain markets chartering ships for a voyage or for months or years is not synonymous with no demurrage costs. The ship charter does not “use” the ship for his own needs unless it’s purchased for a single voyage. Ocean freight market trades every day and the market is fluid. A lot of stuff needs to go from point A to point B. Old Greek guys and their kids making a lot of money figuring out how to “divert” ships every day.