Global coffee exports could be affected by tensions in the Red Sea

Published 2024년 1월 12일

Tridge summary

Tensions in the Red Sea are affecting global coffee exports, leading to a 61% increase in global container rates and longer alternative shipping routes which absorb excess capacity, resulting in higher rates. The conflict is expected to cause delays in global coffee exports, especially from Vietnam, Indonesia, and India, and could lead to volatility in commodity markets and affect various industries. The tensions in the Red Sea began after the start of the war between Israel and Hamas, with attacks on commercial ships increasing by 500% between November and December, resulting in increased insurance costs and concerns about fuel prices and supply chains.

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Original content

By Gabriela Kaneto The beginning of 2024 is marked by growing tensions in the Red Sea, which directly impact global coffee exports, especially from countries such as Vietnam, Indonesia and India. According to the World Container Index, the conflicts have caused global container rates to soar 61% in the past two weeks, reaching $2,670 per 40-foot container. According to data released by consultancy hEDGEpoint Global, attacks on vessels in the region caused ships to follow longer alternative routes, having an effect on routes linking Asia to Europe and the East Coast of the United States. “This absorbed excess capacity in the market, leading to higher rates, especially rates from Shanghai to Rotterdam and Genoa, which increased by approximately 115%,” wrote Natália Gandolphi, coffee analyst at hEDGEpoint, in a report. However, the phenomenon is temporary, and rates are expected to fall again when hostilities in the region subside and there is less imbalance between supply and ...

Source: Cafepoint