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Red Sea attacks halving Suez Canal trade | Red Sea attacks halving Suez Canal trade |
(32 minutes later) | |
The trade volume is being diverted from Suez to route around South Africa’s Cape of Good Hope, the International Monetary Fund reports | |
The Suez and Panama Canals have seen drops in trade of 50% and 32% respectively during January and February, compared with the same months in 2023, the International Monetary Fund (IMF) is reporting. | The Suez and Panama Canals have seen drops in trade of 50% and 32% respectively during January and February, compared with the same months in 2023, the International Monetary Fund (IMF) is reporting. |
According to the fund’s information, transit trade fell in the first two months of 2024 due to Houthi attacks in the Red Sea and to drought affecting the Panama Canal. | According to the fund’s information, transit trade fell in the first two months of 2024 due to Houthi attacks in the Red Sea and to drought affecting the Panama Canal. |
Meanwhile, trade volume via the Cape of Good Hope, the most South-Western point of the African continent, went up by 74% in that same period. | Meanwhile, trade volume via the Cape of Good Hope, the most South-Western point of the African continent, went up by 74% in that same period. |
Attacks on vessels in the Red Sea region decreased traffic via the Suez Canal, a vital route between Asia and Europe that ordinarily handles about 15% of global maritime trade. Consequently, numerous shipping firms rerouted vessels around the Cape of Good Hope, lengthening average delivery times by over ten days. | Attacks on vessels in the Red Sea region decreased traffic via the Suez Canal, a vital route between Asia and Europe that ordinarily handles about 15% of global maritime trade. Consequently, numerous shipping firms rerouted vessels around the Cape of Good Hope, lengthening average delivery times by over ten days. |
A pronounced drought affecting the Panama Canal has compelled authorities to implement substantial limitations on daily ship transits since last October, impeding maritime trade at a crucial juncture where normally about 5% of global maritime trade traverses between the Atlantic and Pacific Oceans. | A pronounced drought affecting the Panama Canal has compelled authorities to implement substantial limitations on daily ship transits since last October, impeding maritime trade at a crucial juncture where normally about 5% of global maritime trade traverses between the Atlantic and Pacific Oceans. |
Such measures have negatively impacted companies with constrained inventories, the IMF said. | Such measures have negatively impacted companies with constrained inventories, the IMF said. |
The organization cautions against the potential impact of these disruptions on inflation rates due to rising shipping costs, as well as complications in global trade and economic activity statistics. | The organization cautions against the potential impact of these disruptions on inflation rates due to rising shipping costs, as well as complications in global trade and economic activity statistics. |
“If continued, the ripple effects of these disruptions could temporarily hamper some supply chains in affected countries and cause upward pressure on inflation [due to higher shipping costs],” it advised. | “If continued, the ripple effects of these disruptions could temporarily hamper some supply chains in affected countries and cause upward pressure on inflation [due to higher shipping costs],” it advised. |
Reports on merchandise trade for January in Africa, the Middle East, and Europe have indicated a deceleration in import growth as a result of these problems in trading. | Reports on merchandise trade for January in Africa, the Middle East, and Europe have indicated a deceleration in import growth as a result of these problems in trading. |
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