15 Nov 2008

Baltic dry could cut food supply

I am pro localisation to some extent and today we dismembered the pumpkins, just two but made a curry which will last a week, which is good because the global food system could collapse this week.

I certainly recommend that all readers have a sober look at the situation, I assuming that the great and the good will launch an emergency plan for this...its not good though...

I have been alerted to the Baltic Dry Index and letters of shipping credit, the more important to an economy perhaps the more obscure.

Essentially because of the credit crunch banks are cutting letters of credit for shipping, cash they can liqify quickly unlike mortgages...so its difficult for ships to get permission to carry and land cargos. Astonishing!

What makes sense in green terms as a transition, i.e. producing and consuming locally, if occuring because of financial accident without planning is likely to create horrifying consequences

Capitalism is in much more severe crisis than perhaps we suspect because obscure but essential financial ecosystems are becoming blocked.

The greenest will come out best, Cuba has some potential to feed people local but here in Berkshire, I just have to keep my fingers crossed that the worst will not occur.

Well I have something to eat!

The Baltic Dry Index, a measure of shipping costs across different ship sizes, has slumped 93 percent from a record in May.

Ships at Anchor

The number of empty capesizes in the spot market may climb to as many as 150 in the next two weeks, said Sjuve, who is a capesize broker. The precise number at anchor is ``very difficult to pinpoint'' because owners don't often announce it, he said.

There are 105 capesizes indicating their status as ``at anchor,'' according to data compiled by Bloomberg. The data doesn't differentiate between ships that are hired and those that haven't got cargoes. On June 30, there were 43.

Zodiac Maritime Agencies Ltd., the shipping line managed by Israel's billionaire Ofer family, said last month it was considering idling 20 of its largest ships. Ukraine's Industrial Carriers Inc. filed for bankruptcy protection last month and London-based Britannia Bulk Holdings Plc was placed into administration under U.K. insolvency laws.

Loan Accords

As many as 20 percent of shipping lines are at risk of breaching their loan accords because the decline in rents has caused a similar plunge in ship prices, Tufton Oceanic Ltd., the world's largest shipping-hedge fund group, said last month.

The 12-member Bloomberg Dry Ships Index has plunged 76 percent from its peak in May, taking its combined market capitalization to $6.7 billion from $27.8 billion.

Global ship orders tumbled 90 percent last month, Richard Sadler, chief executive officer of Lloyd's Register, said in an interview yesterday. The full-year order tally will likely fall more than the 15 percent previously predicted, he said.

The drop in rental rates ``came fast and will be gone quickly,'' China Cosco Holdings Co. Chairman Wei Jiafu said yesterday at a shipping conference in Dalian, China. ``The unusual drop was because of investors' panic amid the global financial tsunami.''

China Cosco Holdings is the world's largest dry-bulk ships operator.

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