what is Baltic Dry Index

A reader asked " what is Baltic Dry Index ". The Baltic Dry Index (BDI) is a number issued daily by the London-based Baltic Exchange.

It traces its roots to the Virginia and Baltick coffeehouse in London's financial district in 1744. Every working day, the Baltic checks with brokers around the world and asks how much it would cost to book various cargoes of raw materials on a number of important routes, for instance how much it would cost for 100,000 tons of iron ore to transport from San Francisco to Hong Kong, or 1,000,000 metric tons of rice from Bangkok to Tokyo.

Index reflects an assessment of the price of moving major raw materials by sea.

What is most important in the index is its trend. It helps in forecasting and analysis of transportation costs and their implications.


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