- Iran-backed group Houthis have attacked in the Red Sea commercial vessels they allege have Israeli links or are sailing to Israel, in solidarity with Palestinians in Gaza.
- Ships taking detours through the Cape of Good Hope will take longer to get to destinations, resulting in delays for the global flow of containers.
Shipping companies transporting coffee in containers have raised freight prices in some routes as a consequence of the attacks in the Red Sea that have forced vessels to take detours, reports the Economic Times citing the International Coffee Organisation (ICO).
Freight prices raise as a consequence of Red Sea attacks
Iran-backed group Houthis, who control much of Yemen including the capital, have attacked in the Red Sea commercial vessels they allege have Israeli links or are sailing to Israel, in solidarity with Palestinians in Gaza. The Houthis said they had “targeted” a container ship operated by CMA CGM, only days after another attack on a Maersk vessel.
The ICO said in a report the situation in the region led some shipping lines to re-route their trips to reduce risks. “Thus, for South-East Asian and East African coffee en route to Europe, unintended consequences include a rise in freight costs as some shipping companies have introduced surcharges to account for the now-extended transit times,” the group said.
European roasters buy a lot of coffee from countries in Asia such as Vietnam, the world’s second largest producer, and Indonesia. They also buy high-quality coffee from Ethiopia and Kenya in East Africa.
The problems in the Red Sea might have additional consequences for the coffee, cocoa and cotton markets, as those agricultural commodities are usually transported in containers. Ships taking detours through the Cape of Good Hope will take longer to get to destinations, resulting in delays for the global flow of containers.
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Source: The Economic Times
