The United Molasses Group is ideally positioned in that we own and lease storage facilities
in strategic points around the globe to ensure that we have constant supplies to satisfy our
key partners with Molasses and/or blends derived from Molasses.
United Molasses charter on average 120 vessels per annum to transport our market share of around 40% of Molasses traded globally. The ships that we employ, either on Voyage or Time Charters, vary from coaster size of ~2,500mtns dwt up to Medium Range size Tankers of 50,000 + dwt. All vessels must be capable of heating cargo up to 40 Deg C or more and loading/discharging at rates expected by our Suppliers and Receivers.
With an often volatile freighting market and fierce competition for tankers from not only the Molasses industry, but also the Hydrocarbon and Vegetable Oil industries, sourcing competitive freight remains a continuous challenge. Not only do we have to compete with higher paying cargoes, we also face continuous regional shifts in adequate vessel supply. As an example, the Palm Oil industry and the ever increasing demand by the EU to use cleaner bio-fuels, continues to soak up all suitable vessels. This market is continually growing and as such, the trade lane between Asia / India to Europe has become a more competitive market for tankers. All this has resulted in a reduction of Molasses suitable vessels available to us with the added complication of having to ship larger quantities from or to ports that are not particularly suited for them.
In recent years, more new oil refineries have been built in the Middle and Far East where previously such operations were concentrated in the US and Europe. This has shifted the dynamics of the freighting market in that new trade lanes are being created which are competing for the same MR vessels which the Molasses trade employ. Again this results in a thinning out of available vessels which affect the freight rates that we can achieve.
Finally, with the soaring price of oil and oil related products, the cost of a voyage has grown massively in the past few years. With an MR size vessel burning on average 33mtns of fuel oil and 2mtns of diesel per day, the difference in cost of a 30 day voyage from Asia to Europe has grown by around $480,000 ($12/mt) in the past 4 years whereas generally the freight rates earned by owners has decreased or stagnated over this same period. At these levels, it is becoming more difficult for vessel owners to sustain their business interests in the current market especially when one considers the cost of a new build MR vessel is in the region of $45m.