The Black Sea grain freight market has hit rock bottom, with rates dropping below operating costs, effectively forcing shipowners to subsidize trade, Gennadiy Ivanov, director and co-founder of dry bulk company BPG Shipping, said during a 26 February online presentation at Trend&Henge Club, where ASAP Agri serves as an informational partner.

With the grain export season winding down, trading activity is expected to slow further, which could exert additional but limited downward pressure on freight rates in the short term, Ivanov noted. However, in the medium to long term, an upward correction may emerge as older vessels exit the market. Some shipowners may scrap aging vessels or reposition them to other regions, while others could keep their ships idle rather than operate at unsustainable rates.

Insurance costs are expected to decline gradually, with additional war risk premiums currently ranging between 0.5% and 0.85%. Meanwhile, transnational companies are returning to the Black Sea and, particularly, the Ukrainian grain trade. Their stronger financial standing may intensify competition, potentially pushing smaller Ukrainian exporters away from CIF contracts and into FOB trades, Ivanov said.

The expert noted that CIF contracts surged after the war began, as buyers were hesitant to purchase on an FOB basis. However, more exporters — especially smaller players — are now shifting back to FOB trading. Major grain buyers are also placing more FOB bids to take advantage of lower freight costs, though CIF trading still accounts for roughly 75% of exports.

As global agribusiness giants re-enter the Ukrainian market, they are likely to favor newer, higher-specification vessels, signaling a shift away from older, lower-cost ships.

Additionally, if the security situation in the Red Sea improves, the 2025/26 grain season could see increased sales to Asian markets via the Suez Canal — assuming no further geopolitical escalation in the region.