Maritime Trade on Grains
Grains such as wheat, millet, maize, rye and rice have
been transported by sea, especially in the Mediterranean since ancient times,
and nowadays, are generally carried in bulk around the world.UNCTAD (2001)
reported that world grain trade reached 225 million tons in 2000, which showed
an increase of 2.3 per cent from 1999. Grain exports in 2000 from the five
largest exporters were the following: United States (86 million tons), Australia
(20.8 million tons), Argentina (19.3 million tons), European Union (29.6 million
tons) and Canada (22.2 millions). In terms of wheat, total wheat trade in
1999-2000 according to the International Grains Council (IGC) amounted to
109 million metric tons, with Argentina, Australia, Canada, European Union
and the United States as the five biggest exporters.
Imports of
grains had increased in the Middle East and North Africa due to the scant
crop harvests attributed to drought. In terms of forecast, the IGC noted
that for the season 2000/2001, there would be a shortfall of grains production
compared to consumption and this would lead to a fall in world carryover stocks
for the third consecutive season. Wheat production, for example, during the
1998/1999 and 199/2000 seasons was 586 and 584 million tons, respectively.
The production forecast for 2000/2001 was 573 million tons whereas consumption
for the three seasons was placed at 588, 590 and 595 million tons, respectively.
FAO statistics on cereals is shown in Table 1
The global
rice trade was estimated at 22.4 million tons in 2000. For 2001, the forecast
is about 3.5% more than 2000 but 0.8 million tons less than expected on account
of the dramatic low prices experienced by farmers in 2000 as well as the possibility
of raising tariff by several major importers. Among the chief reasons for
poor rice harvest are drought and flood but for 2000, commercial rice imports
by developing countries dropped by 10% on account of satisfactory crop harvest
over the last two seasons.
International
wheat and course grain prices made small gains and large supplies in the exporting
countries continued to weigh on the cereal markets. India for example, had
bumper production of wheat in 2000 and became net exporter during 2000/2001.
Generally, excess supplies lead to reduce import and export becomes an important
policy option to maintain domestic prices and reduce storage costs. For most
of 2000, ocean freight market was unseasonably firm, which allowed shipowners
and charterers competition to gain from the initiative (Table 2).
Total cereals
imports by the developing countries during the 1999/2000 season was slightly
below 160 million tons or about $21 billion in terms of import bill. Among
the Low Income Food Deficit Countries (LIFDCs), total import in 1999/2000
was estimated at over 68 million tons or about $8.7 billion.
Food Aid
Natural catastrophe
like flood and drought, poor harvest and mismanaged economies including armed
conflicts are among the major reasons for severe food shortage. More than
18 million people in 16 African countries are facing severe food shortage
whereas in Asia, about 15 million in 9 countries, in Latin America over 1
million in 4 countries and in the Near East, over 7 million in 3 countries.
In Europe, estimates are about 1 million, mostly in the Balkan regions and
Russia. Thus significant food aid shipment will be required in the coming
months of 2002.
In December
2001, the Food Aid Committee noted that food aid shipments from its Member
States in 2000/2001 season was provisionally put at 10.4 million tons (wheat
equivalent), considerably in excess of members’ combined minimum annual commitments
of over 5 million tons.
Leading recipient
countries in 2000/2001 were Ethiopia, Nicaragua, Bangladesh, Indonesia and
Peru. About 45% of total shipments were transported to least developed countries.
Based on the press release of IGC-FAC in December 2001, over 1.8 million tons
of members’ aids were channelled multilaterally, mainly through the World
Food Programme. Most aid was cereals or cereal products but shipments also
covered eligible non-grain food products. About 94% of members’ total aid
under the Convention was sent to the least developed countries as grants.
Maritime
Transport of Grains
Originally, grain was transported in sacks, but by the
middle of the 20th century the normal procedure was to carry it in bulk.
It could be stored, loaded and unloaded easily and the time taken to deliver
it from producer to customer was greatly reduced, as were the costs involved.
However, grain has one great hazard when carried at sea in bulk; it tends
to shift within the cargo space of the ship. Because of this danger and the
great amount of grain transported by sea, special rules governing its carriage
in bulk have appeared in various international instruments including the International
Convention on the Safety of Life at Sea (SOLAS).Grain has a
tendency to settle during the course of a voyage, as air is forced out when
the individual grains sink (“sinkage”). This leads to a gap developing between
the top of the cargo and the hatch cover. This in turn enables the cargo
to move from side to side as the ship rolls and pitches. This movement can
cause the ship to list and, although initially the ship’s movement will tend
to right this, eventually the list can become more severe.
In worst cases,
the ship can capsize. This problem was well known and when the International
Maritime Organization came into being in 1959, one of its first tasks was
to consider new measures for improving the safety of bulk carriers. These
were incorporated into the International Convention for the Safety of Life
at Sea (SOLAS), 1960. This was a new version of a convention that owed its
origins to the Titanic disaster of 1912. The new bulk carrier regulations
were more advantageous from an economic point of view than those adopted in
SOLAS 1948 (which required a more extensive use of increasingly expensive
temporary fittings and/or bagged grain) and many countries quickly put them
into effect, even though the Convention itself did not enter into force until
1965.
However, the
new regulations still had some deficiencies as far as safety was concerned,
for during a period of four years, six ships loaded under the 1960 SOLAS rules
were lost at sea. IMO began looking at this problem early in 1963 and asked
masters of ships to contribute information to a broad study. Further studies
and tests showed that some of the principles on which the 1960 regulations
were based were invalid in particular, it was shown that the 1960 Convention
had underestimated the amount of “sinkage” which occurs in grain cargoes loaded
in bulk. This made the basic requirements of the Convention unattainable.
As a result, the IMO Assembly in 1969 adopted new grain regulations [resolution
A.184 (VI)], which became generally known as the 1969 Equivalent Grain Regulations.
Voyage experience
over a three-year period showed that the 1969 Grain Equivalents were not only
safer but were also more practical and economical than the 1960 regulations
and, with slight amendments, based upon operational experience, they were
used as the basis of new international requirements which were subsequently
incorporated into the 1974 SOLAS Convention.
Although grain was the only bulk cargo to be given a special
chapter in the 1960 SOLAS Convention, IMO also developed an international
Code of Safe Practice for Solid Bulk Cargoes (BC Code), which was adopted
in 1965. The Code has been updated at regular intervals since then and is
kept under continuous review by the Sub-Committee on Dangerous Goods, Solid
Cargoes and Containers. The practices contained in the Code are intended
as recommendations to Governments, ship operators and shipmasters. Its aim
is to bring to the attention of those concerned an internationally accepted
method of dealing with the hazards to safety, which may be encountered when
carrying cargo in bulk. The codes that
are most relevant to the safety of bulk carriers are the revised BC Code and
a new mandatory International Code for the Safe Carriage of Grain in Bulk
(International Grain Code). Like the original grain rules,
the Code is designed to prevent the particular qualities of grain threatening
the stability of ships when it is carried in bulk. It applies to all ships
- including existing ships and those of less than 500 tgt (total gross tonnage)
- that carry grain in bulk. Part A contains special requirements and gives
guidance on the stowage of grain and the use of grain fittings. Part B deals
with the calculation of heeling moments and general assumptions.
Part C of the
revised SOLAS Chapter VI, Regulation 9 stipulates the requirements for cargo
ships carrying grain. Regulation 9.1 states that a cargo ship carrying grain
shall comply with the requirements of the International Grain Code, and hold
a document of authorization as required by that Code. In Regulation 9.2,
a ship without a document of authorization shall not load grain until the
master satisfies the Contracting Governments of the port of loading that the
ship comply with the requirements of the Code.
Sources:
Lloyd’s Shipping
Economist, July 2001-12-25
International
Grain Council (www.igc.org)
UNCTAD 2000
and 2001 – Review of Maritime Transport.
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