It seems premature to make a judgement about the 1998-1999 season as a whole. 

Nevertheless, several factors are already indicating another difficult season. 
 

• Under the influence of the spot rates of the 1997- 1998 season, the contracts for the 1998-1999 season were renewed at rates below those of the previous year. 
• Certain charters for pick-ups from Chile at the beginning of January are reported at rates of 17-20 cents/cu ft/30 days for ships of around 400,000 cu ft, practically 50% below last year. 
• The unpredictable influence of the La Niña weather pattern (reverse effect induced by El Niño). 
• The considerable damage caused by hurricane Mitch in November in Nicaragua, Honduras, Guatemala, Costa Rica and El Salvador. 
• The frost in California at the end of December. 
• As the unemployment rate is still high in the EU countries, household consumption should still give priority to staple products rather than to expensive fruits. 
• The financial crisis in the Far East and the growth crisis in South Korea. 
• The fragile financial situation in Russia resulted in a substantial decrease in imports of frozen chicken and of bananas in the second half of 1998. 
• The direction of China's policy remains very uncertain. 
• Developments in the "banana war" between the United States and Europe. 
• The owners of old ships, or ships no longer meeting market standards and the requirements of most charterers, still do not appear decided to sell them for scrap, even though it is hard for the terms obtained to justify their reactivation. The scrapping potential, considering ships that will be 25 or more years old in 1999, is 66 ships of more than 300,000 cu ft with a capacity of approximately 30.8 million cu ft. 
• As mentioned above, 33 new reefer ships are scheduled to join the fleet in 1999, with a total capacity of about 14.7 million cu ft. 
• At the same time, 41 container ships of more than 2,000 teu are scheduled for delivery in 1999, with a refrigerated container carrier capacity of about 20,000 teu, corresponding in volume to about 20 million cu ft. 

Unfortunately, we do not see any hope of a recovery in the short-term market this year. Only the return of the economic indicators of large regions, particularly in the Far East and Russia, to green will enable a positive trend in the market to be considered. However, a trend can be noted for the major operators to develop regular packet services with integration of land logistics on routes such as South Africa / Europe and the United States, Caribbean / Europe, and West coast of South America / United States and Far East, in order to face up to the competition from container ships. 

The fall in freight rates and the general state of the market resulted in a further slowdown in second-hand ship buying and selling activity this year. This is quite logical, given that a second-hand ship is put into service as soon as it is acquired, in contrast to the case of an order for a newbuilding ship which will not enter service until at least 9 or 12 months after the signature of the contract. 

1997, already showing low activity with only some fifty transactions recorded, was succeeded by a still smaller 1998 vintage, with less than forty transactions negotiated. Moreover, most of them involved small or medium-size ships. Most of the transactions concluded for larger ships included a back time-charter, the reported price not reflecting the real market value of the ship. The following "dry" sales give an idea of the market: 

• "Emerald Reefer", 237,278 cu ft, built in 1991, height 2.20 meters, 2,550 square meters, 1,875 pallets, 15.7 knots, 6 x 5 tonne derricks, sold to the Sun group at a reported price of $6.25 million in July 1998. This ship was offered for sale in 1997 at a price of about $10-11 million. 
• "Californian Reefer", 508,551 cu ft, built in 1990, height 2.20 meters, 5,854 square meters, 17.5 knots, 8 x 7 tonne derricks, sold by Toshin Kisen to Foresight for a reported price of $15.2 million. 
• "Diamond Reefer", 516,227 cu ft, built in 1992, height 2 .20 meters , 5,851 square meters , 18.9 knots, 38 teu, 8 x 7 tonne derricks, sold by Kawasaki to the Sun group for a reported price of $16 million. 

The market conditions do not give any indication of a firming up of this sector in 1999. All that can be anticipated is a desirable increase in the volume of sales for scrapping. 

In contrast to 1997, the number of orders placed in 1998 was more moderate. Apart from the taking-up of options, the only significant order was that by the Greek shipowner Enterprises Shipping and Trading: two sophisticated ships of 582,000 cu ft, tween-deck height 2.20 meters, 7,300 square meters, 5,600 pallets, 23 knots, 440 teu, pallet side-loader, 2 x 45 tonne cranes, controlled atmosphere, from China Shipbuilding Corporation (CSBC), with an option for two more ships. The two firm-order ships are scheduled for delivery in August and November 2000. The reported unit price for these ultra-modern units is $30 million. 

Given the freight rate trend, the market orientation and the large number of deliveries scheduled for 1999, and on condition that the level of scrapping remains low, it can be predicted that the order activity will again be extremely small in 1999.