Traders using the Suez Canal in the Red Sea have been experiencing major headaches after Iranian-backed Houthi rebels launched numerous attacks on shipping vessels. The geopolitical unrest has disrupted the fastest sea route between Asia and Europe carrying 12% of global container traffic, The Business Standard has reported.
And while oil and gas prices may go up and down, for the rest of the market the future is filled with uncertainty. The chaos has forced ships to change course as exporters fear that consumer goods, mainly fruit and vegetables may spoil and become unsellable.
Bloomberg is reporting that in addition to delayed shipments of coffee, kiwi, and citrus fruits, Chinese ginger prices are going up by the day.
For exporters who have ditched the Suez Canal and chosen to use different routes, freight costs have more than quadrupled, while transit times have doubled, says the managing director of India-based grape exporter Euro Fruits, Nitin Agrawal.
“Everyone is a loser here,” Agrawal shared.
According to some farmers, lowering their prices will be one way to cover their shipping costs while still selling their goods.
“Exporters always manage to cover their costs. It will be our losses if prices crash,” said Sandeep Dagu Sandhan, a grape grower in India.
