GLOBAL- The World Trade Organization (WTO) has reported a significant increase in the diversion of grain shipments from the Suez Canal due to escalating attacks on commercial vessels in the Red Sea and the Gulf of Aden by Iranian-backed Houthi militia based in Yemen.
The WTO disclosed this information on a social media platform on January 18, raising concerns about the impact on global wheat shipments.
According to the WTO’s post on X (formerly Twitter), wheat shipments through the Suez Canal experienced a substantial decline, reaching 500,000 tonnes in the first half of January, almost 40% lower compared to the same period last year.
The organization highlighted a surge in the volume of re-routed vessels over the past two weeks, though it noted that this has not yet had a major impact on total deliveries to Asia or Eastern Africa.
The Suez Canal, serving as the shortest shipping route between Europe and Asia by connecting the Red Sea and the Mediterranean Sea, has historically played a crucial role in global trade.
However, recent attacks by Houthi militants have led to disruptions, prompting vessels from the European Union, Russia, and Ukraine to explore alternative routes.
The WTO revealed that approximately 42% of wheat shipments from these regions that would typically pass through the Suez Canal opted for alternative routes in the first two weeks of January, a significant increase from 8% in December.
This diversion is attributed to the attacks by the Houthi militia, which began in November, following Hamas’ surprise attack on Israel and the subsequent Israeli counteroffensive on the Gaza Strip.
Major shipping firms, including Maersk, Hapag-Lloyd, and the Mediterranean Shipping Co., have taken precautionary measures by suspending shipping through the Suez Canal.
Some carriers are choosing longer routes via the Cape of Good Hope to Europe and the United States, resulting in extended journey times and increased costs.
The global grain shipping industry is grappling with additional challenges in various regions. Lower water levels in the Panama Canal, caused by drought, have led to reduced grain shipments, as larger vessels are unable to navigate the canal.
Furthermore, the ongoing two-year-long invasion of Ukraine by Russia has contributed to a decrease in Ukrainian grain exports, compounding the complexities faced by the global grain trade.
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