Cargo Business Newswire

Tuesday, February 18, 2014

Top Story

Asia food importers shift from dry bulk to container ships

Asian food importers are shifting from dry bulk cargo ships to container ships, as a way to import smaller amounts at a cheaper rate per ton.

Agricultural commodities have typically been shipped via bulk carriers that hold 70,000 tons of a single cargo, such as corn or sugar.

But the paradigm is changing as ships look to fill empty containers after offloading goods in Western countries and offer competitive rates for food going back to Asia.

Asian import demand for animal feed grains is increasing as higher incomes promote a change away from the rice-based diet to more meat and dairy products, which gives smaller importers more opportunities.

According to the U.N. Food and Agriculture Organization, China is expected to best the European Union as the world's top pork users on a per capita basis by 2022, and its dairy product consumption is expected to increase by 38 percent.

"As Southeast Asia develops economically, you have demand for better quality, high-protein diets, and ports don't (necessarily) have the infrastructure for bulk vessel receiving," said Brian Bickford, president of AgriLogistics, a U.S. company specializing in grain shipping.

U.S. containerized grain exports to Asia have more than doubled since 2006 to 470,832 TEUs in the first 10 months of 2013, up 10 percent year-over-year, according U.S. Department of Agriculture (USDA) data.

Analysts estimate that 12 to 15 percent of Australia's grain exports are now shipped in containers to Asia.

Future growth in food transported via containers depends in part on the global demand for Asian manufactured goods, which makes empty containers available in food exporting countries.

For more of the Reuters story: in.reuters.com