Join our crew and become one of the 104,353 members that receive our newsletter.

Bulk Ship Loading Grain, Image by the Port Of Seattle

Cargill: Bulker Buy Simply an “Opportunistic Play”

Reuters
Total Views: 14
May 9, 2013

File photo

reuters logoBy Jonathan Saul

LONDON, May 9 (Reuters) – Cargill Inc’s move to order bulker ships is taking advantage of low vessel values and the U.S. agribusiness company has no plans to become a long-term ship owner, the group’s shipping chief said on Thursday.

The dry bulk shipping market is in a fifth year of one of its worst downturns on record after shipping firms ordered large numbers of new vessels between 2007 and 2009 – just in time for the collapse of the global economy after the 2008 financial crisis.

Overcapcity has sent vessel values for large capesize ships to record lows.

Cargill, one of the world’s largest privately held corporations, recently said it had formed a joint venture with another company to purchase capesize ships from a shipyard in China. The Minneapolis-based group last owned ships in 2003.

“Cargill traditionally is not a shipowner – that is not the way we intend to go,” said Cargill’s head of ocean transportation Roger Janson. “We have ordered some vessels because the asset price is good,” he told a Lloyd’s List shipping summit in London.

The value of a five-year old capesize ship has slumped to just over $30 million from more than $150 million at the height of the boom.

Janson said Cargill planned to run the vessels with its joint venture partner until the market picks up and would then look to sell them.

“The idea is not to run them for the next 20 years. We do not want to be a long-term ship owner. It’s an opportunistic play,” he said.

Janson said Cargill could look at other ship orders but that would depend on the opportunities on offer.

Cargill, one of the world’s top charterers of dry bulk freight, has more than 400 vessels on charter at any given time, transporting over 150 million tonnes of goods a year.

(c) 2013 Thomson Reuters, Click For Restrictions

Unlock Exclusive Insights Today!

Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.

Sign Up
Back to Main
polygon icon polygon icon

Why Join the gCaptain Club?

Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.

Sign Up
close

JOIN OUR CREW

Maritime and offshore news trusted by our 104,353 members delivered daily straight to your inbox.

Join Our Crew

Join the 104,353 members that receive our newsletter.