USDA: Grain freight rates fall to lowest level in 5 year

The latest Department of Agriculture Grain Transportation Report said ocean shipping rates for shipping bulk grain have reached their lowest levels in five years amid a world economic downturn, as fears and uncertainties expressed themselves in the world markets, causing reduced demand for bulk shipments.

As of Oct. 24, the cost of shipping grain from the Gulf to Japan was $31 per metric ton, the lowest since June 2003. The rate from the Pacific Northwest to Japan was $17 per metric ton, the lowest since November 2002. It is expected that rates will remain low as long as the economic slump persists, the report said.

During the week ended Oct. 23, 42 oceangoing grain vessels were loaded in the Gulf, down 9 percent from last year. In the report, dated Oct. 30, the USDA said 60 vessels are due within the next 10 days, down 28 percent from last year.

In August containerized grain shipments were down 8 percent from August 2007 but 67 percent above the three-year average, the report said.