In contrast to earlier expectations, ocean freight rates were mostly firmer during the first quarter of 2000 (Table A.9). Much of this strength was attributable to rising oil prices, which pushed up bunkering charges and thus owners' operating costs. However, a slight easing in oil prices was seen in late March in anticipation of an increase in production quotas for OPEC members. In the dry cargo sector, demand for grain shipments was muted, with transactions centred on bookings for new crop grains and oilseeds from the southern hemisphere. Australia sold 0.9 million tonnes of wheat to Iraq. This business included the largest ever single shipment of 130 000 tonnes from Port Kembla. Elsewhere China was an active buyer of US soyabeans, reportedly purchasing 0.9 million tonnes requiring up to fifteen Panamax vessels. Competition for spot tonnage was supported by the continued economic recovery in Far East Asia. Several fixtures for thermal coal resulted from the imminent commissioning of new generating capacity in the Republic of Korea and Thailand, and others were needed to cover imports of iron ore for steel production in China. A number of fixtures were announced for aid cargoes of US maize to Russian Federation. Such business is subject to Cargo Preference rules, which give priority to available US flag vessels. Rates from the US Gulf to various Russian Federation or Baltic ports ranged between US$57.37 to almost US$75.00 per tonne, considerably in excess of normal commercial rates. The overall direction of the freight market is reflected in the movement of the Baltic Dry Index (BDI), a weighted average of rates on major dry cargo shipping routes. The BDI opened the year at 1 320 and hit a peak of 1 650 in early March, before declining to 1 624 later in the month.
