Conflicts in the Middle East and North Africa are beginning to affect Brazilian agribusiness exporters. Increases in the value of maritime freight, imposition of risk fees, delivery delays, and the possibility of container shortages are some of the factors that companies have started to account for, according to experts.
For now, exporters consider the situation “manageable”, but a yellow light has been turned on. In the short term, the biggest concern is the availability of containers, which may limit shipments of products such as meat, coffee, and sugar.
Shipping companies have been seeking longer and more expensive routes to fulfill deliveries, in an attempt to minimize risks. However, these detours generate delays of between 15 and 20 days.
These, in turn, can create bottlenecks in Brazilian ports. This is because delays in deliveries will also delay the return of containers to Brazil for new shipments. With production underway, there is the possibility of producers having to wait at ports for equipment availability for new shipments.
According to industry sources heard by Brazilian outlet InfoMoney, the situation is more critical for perishable products, which have a shorter shelf life, but it is already interfering in the plans of exporters of beef, poultry, and pork.
In the poultry sector, Asia (excluding China) and the Middle East account for half of Brazilian exports. For beef and pork, China is the main destination, with more than 40% of shipments. However, containers sent from China to Europe pass exactly through the critical navigation route.
Problems
Maritime transport has faced challenging conditions around the world. In the Red Sea, Houthi rebels from Yemen have been attacking merchant ships passing through the Suez Canal. The passage connects the Mediterranean Sea to the Indian Ocean and is fundamental in supplying southern Europe, northern Africa, and much of the Middle East.
The route through the Persian Gulf has also become a problem. About two weeks ago, Iran and Pakistan carried out mutual attacks, in an escalation considered unprecedented between the neighbors. The ports in the region supply Iran, Iraq, the United Arab Emirates, and some Asian countries. The situation is more worrying at the port of Bandar Abbas, in southern Iran.
There is also tension in North Africa, between neighbors Algeria and Morocco. Instability in the region has been long standing.
Finally, a historic drought has lowered the water level in the Panama Canal, reducing the flow of ships that cross the Central American country, through which about 6% of global trade passes.