Red Sea piracy also slows down vegetable exports

Armed raids by Houti rebels from Yemen on civilian shipping through the Red Sea are not only hampering European vegetable exports to the Far East and the American west coast, but also the import of luxury goods from China and Japan.

In addition to exports, there will also be problems with imports arriving via this route, such as grapes from India, avocados from Kenya and seasonal products from South Africa and Israel, the UN Food and Agriculture Organization (FAO) reports.

Ukrainian apple exporters are already experiencing problems with supplying markets in the Middle East. Suppliers from Poland, Italy and Moldova are expected to experience similar problems.

The Red Sea and the Suez Canal are the most important global shipping route between East and West. Major shipping companies such as Maersk and Hapag-Lloyd have already stopped their container transport on that route and are considering detouring via South Africa. This means a transport delay of about three weeks. Ships that were already underway wait in safe zones until they can continue sailing. 

The pro-Iranian Shiite Houthi rebels control part of Yemen. For several weeks now, they have been attacking international ships off their coast to put pressure on Western companies in the Israeli-Palestinian conflict.

Oil exports from Saudi Arabia and the United Arab Emirates to Europe and the United States are also in the danger zone. This will first lead to delays and diversions and will not immediately result in the closure of oil wells. US investment bank Goldman Sachs has estimated that seven million barrels of oil per day are shipped through the Bab el-Mandeb Strait, which will be diverted. That would also increase spot crude oil prices by $3-4.

Chinese carmaker Geely warned on Friday that sales of electric vehicles are likely to be affected by a delay in deliveries due to the Red Sea 'situation'. If the Red Sea issue remains unresolved, shipping companies are expected to adjust freight rates, which will lead to rising transportation costs, the company added.