Marc Pauchet News

Freight shipping prices have plummeted to a historic low, fueled by a long-standing problem of too many ships and lower demand from China, as per a report in AFP. However, the economists say that this is not a serious warning sign on the global economy. Last week, the Baltic Dry Index, the global benchmark for freight rates for ships carrying raw materials, plunged to its all-time low. BDI, which tracks the cost of transporting dry commodities such as coal, iron ore and grain across 20 shipping routes, dropped ON Wednesday to 509 points, its lowest level since the creation of the index in 1985. The global commodity trade is dominated by Chinese imports of key raw materials like coal and iron ore.

A potential El Nino weather phenomenon, which could wreak havoc on global crops, is set to disrupt shipping patterns and raise freight costs, leaving suppliers and importers to cover their food needs from longer-haul destinations. El Nino, a warming of sea-surface temperatures in the Pacific, can trigger floods and drought in different regions, hitting production of key foods such as rice, wheat and sugar. Weather forecasters are increasingly predicting it will return in 2014 for the first time in five years.