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UNCTAD expert: Suez Canal ship floatation is a relief for global trade

Suez Canal

The floatation of EVER GIVEN in Suez Canal and the crossing of some of the smaller vessels was  a source of relief for workers in global trade and development, maritime expert Jan Hoffman at UN trade and development agency (UNCTAD) said.

Hoffman said the passage of all larger ships through the canal will “take quite some time”, indicating that there is a large accumulation of ships in the Mediterranean and south of the Suez Canal, which can be clearly seen on the maps.

He said some ships, especially the biggest ones, have changed their direction to the Cape of Good Hope, South Africa, which will lead to a decrease in the arrival of ships from Asia to Europe, by about 30% in April.

This percentage will increase in the coming months, he said, for cumulative reasons, noting that for Western Europe, about 20% of all food, drink and clothing pass through Suez.

With regard to some other products, including electronics, office equipment and textiles, the proportion of what is transited into the Suez Canal is between 40% to 50%, he said.

“Some of these commodities it is better to be prepared for some delays in Internet orders”,  he said.

He said efforts being made to help the least developed countries, to spare them the effects of suspending movement in the Suez Canal, through customs automation, port reform, and trade facilitation solutions to compensate in one way or another, while reducing trade costs.

Hoffman predicted that prices would be affected, because of the suspension of movement on the Suez Canal, adding that the cost of transporting these goods to deliver them to the consumer will increase.

He also noted that freight prices in recent months have actually increased, but freight rates have already exceeded the ceiling compared to the average of past decades, which is because the shortage of ship containers due to the Coronavirus pandemic.

Hoffmann stressed that the difficulty of obtaining empty containers is a problem that was present before due to the Coronavirus pandemic but exacerbated by the Suez Canal crisis, pointing out that there is an imbalance, especially between China and the United States.

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