The ramifications of the war in the Middle East and the freight crisis it has caused in the Red Sea are severely disrupting the flows of agricultural exports and threatening the campaigns in many countries. Mourad Erraguragui, vice-president of the Moroccan Association of Intercontinental Road Transport and branch director of a multinational freight company operating in Morocco, explains the effects of the Red Sea crisis on Moroccan exporters.
Mourad Erraguragui, vice-president of the AMTRI
To this day, the blockage at the Bab Al Mandab Strait, south of the Red Sea, persists, says Erragueragui: "Despite the creation of a coalition by the USA to secure maritime traffic in the region, nothing has changed. Shipping companies consider the risk too great, and most of them have decided to make the detour around the Cape of Good Hope. This situation is unbearable, as it represents 15% of the world's shipping flows. Most of the shipping companies have deserted the Red Sea, which has an impact on all exports, but also on imports from and to Asia, including in the agricultural sector."
This major crisis divides the world into two parts, more or less disconnected depending on the products traded, adds Erraguragui: "On the one hand, there's Europe and North Africa, on the other, Asia and easter Africa. The damage to agricultural campaigns varies according to the products in season. The hardest hit campaigns are those of citrus fruits in Egypt, apples in Poland and other European countries, and grapes in India, for example."
Erraguragui adds that "the shortfall in trade will soon become apparent - if nothing changes - at the time of the Chinese New Year, which is a great opportunity for fruit exports to China." The crisis also coincides with the procurement period in preparation for the month of Ramadan, which cuts Moroccan exporters off from countries with large Muslim populations in Asia, such as India, Bangladesh, Pakistan, Indonesia, and Malaysia.
It is difficult to accurately assess the impact of the crisis on Moroccan exporters for the simple reason that the Moroccan campaign is already suffering the full effects of the drought, which has considerably reduced exports to Asia, as exporters are focusing on the European market with the volumes they were able to harvest this season.
Erraguragui adds: "The Red Sea crisis has exacerbated the impact on the Moroccan agricultural sector, as transport costs from and to Asia have now increased, and even doubled in some cases, and delivery times have risen by 10-15 days. This makes exporting fresh Moroccan produce too expensive for the end consumer, not to mention the long delivery times that some perishable products cannot withstand. The whole ecosystem is affected, including workers who lose working days and transporters". The products most affected, given the current period of the season, are berries and citrus fruit.
Is there any sign that the situation will soon come to an end?
"No one can predict when or how it will end," replies Erraguragui."In fact, no one could have foreseen the outbreak of this crisis and the Houthis' involvement in the war. Shipping is a high-risk sector that can undergo sudden, profound, and long-lasting changes. However, if the crisis persists or worsens, we can expect sea freight prices via the Cape of Good Hope to stabilize or even decrease once all parties have acclimatized to the new lines and the daily fluctuations have ceased."
For more information:
Mourad Erraguragui
Moroccan Association of Intercontinental Road Transport (AMTRI)
Tel.: +212539340706 / +212539321716
Email: [email protected]
www.amtrimaroc.com