London, UK: Food prices are expected to rise with freight travelling through the Suez Canal almost halving since Yemen’s Houthi rebels began attacking cargo ships in the Red Sea, according to the United Nations Conference on Trade and Development.
Jan Hoffmann, the agency’s head of trade logistics, said food prices could feel the impact, adding about half of the increases seen since the war in Ukraine were due to higher transport costs, although consumers in developed countries may take some time to see an effect.
“Passing on these higher freight rates to consumers takes time, up to a year until… we would really see them in the shop, whatever shop – Ikea, Walmart or something,” he said. The number of ships using the canal over the last two months had fallen by 39%, leading to a 45% decline in freight tonnage, the UN agency said.
Hoffmann said there were now three key global trade routes disrupted, following Russia’s invasion of Ukraine and the Panama Canal, where low water levels from drought meant shipping last month was down 36% year-on-year and 62% from two years ago.
The Suez Canal handles 12-15% of global trade and 25-30% of container traffic. Container shipments through the canal were down 82% in the week to 19 January from early December.
