January 22, 2024

Wheat shipments via Suez Canal plunge amid rising security concerns

In a recent report from the World Trade Organisation (WTO), it has been revealed that wheat shipments through the Suez Canal witnessed a significant decline of almost 40% in the first half of January, totalling 0.5 million metric tonnes, XM reported.

The data, sourced from a joint dashboard by the International Grains Council (IGC) and the WTO, points to the impact of security concerns following attacks in the Red Sea and Gulf of Aden.

The decline in wheat shipments adds to the growing trend of ship diversions in response to recent attacks on vessels by Iran-aligned Houthi militants in Yemen. Shipping sources had earlier indicated an expectation of some grain cargo diversions, but many vessels continue to navigate the Suez Canal, a crucial and shorter route connecting Europe and Asia.

December figures revealed that approximately 8% of wheat shipments from the European Union, Russia, and Ukraine, which traditionally pass through the Suez Canal, opted for alternative routes. This percentage surged to around 42% in the first half of January, highlighting a notable shift in shipping patterns. Before the attacks, the share of alternative routes was a mere 3% on average.

Despite the increase in diversions, the WTO report suggests that there are few, if any, outright cancellations of shipments. It notes that the rising number of diversions has, as of now, had a limited impact on the total volume of deliveries.

-       XM