Wheat shipments through Suez Canal down 40%

Pexels/Samarth Singha

• Houthi attacks cause rerouting
• Alternative routes up sixfold
• Egypt’s canal revenue badly hit

Shipments of wheat through the Suez Canal have fallen by 40 percent year-on-year as a result of the continuing crisis in the Red Sea, the World Trade Organisation’s Wheat Dashboard shows.

Major shippers are avoiding the waterway, through which 15 percent of maritime commerce passes, causing supply chain disruptions and threatening a new wave of global inflation.

The Suez Canal provides around 10 percent of Egypt’s current account income, the consultancy firm BMI estimates.

• Escalation risk in the Red Sea and GCC economies

• Red Sea attacks could harm more than ports and shipping

• Fears of supply disruption push crude prices over $80

Annual revenue from the canal was $10.25 billion last year, Osama Rabie, chairman and managing director of the Suez Canal Authority, told a talkshow on the MBC Masr TV channel earlier this month.

It is estimated that around 76 million metric tonnes of grains, oilseeds and oilseed products are shipped annually from the EU, the Russian Federation and Ukraine to Asia and Eastern Africa, representing 17 percent of global trade in those commodities.

In December last year around 8 percent of wheat shipments from the EU, the Russian Federation and Ukraine to selected Asian countries and Eastern Africa were delivered via routes other than the Suez Canal, up from an average of 3 percent before December.

Rabie said that dollar revenues from one of the world’s busiest waterways, a crucial source of hard currency for Egypt’s beleaguered economy, were down 40 percent from the start of 2024 compared to the previous year, and they will be “very affected” by the ongoing hostilities.

Shipping industry giants including CMA CGM of France, MSC of Switzerland and A.P. Moller-Maersk of Denmark, have chosen to reroute vessels around the Cape of Good Hope and the tip of Africa.

This adds an extra 3,000 nautical miles and 10 days to the journey, as well as up to $1 million extra on the fuel bill for each trip between Asia and Northern Europe.

During the first half of January the share of wheat shipments using alternative routes is estimated to have risen to 42 percent.  

Wheat shipments from the EU via routes other than the Suez Canal totalled 330,000 tonnes from the start of December to mid-January. This was up more than six-fold from 50,000 tonnes during the same period in 2022-3.