South African exports to Saudi Arabia and Jordan are affected by the situation in the Red Sea. While some exporters still use Red Sea ports like Jeddah and King Abdullah Port (necessitating a US Navy escort and “hectic” insurance premiums when entering Red Sea waters), various others have told FreshPlaza they see no alternative but to send to the smaller Saudi port of Dammam in the Persian Gulf.
There is doubt whether Dammam is equipped to handle the volumes coming their way.
“The Red Sea impact on South Africa comes down to delicate fruit: stonefruit, grapes and summer pears that can’t ship to long transit time. It’s just putting pressure on everybody, and it puts pressure on other markets,” says an exporter who asked not to be named, given the sensitivity of proceedings.
He notes, from comments made by clients in the Middle East, that South Africa’s pro-Palestinian stance is winning the country friends in the Arab world.
Those countries could run short of fruit, he says, adding: “Even in Europe you’re going to see periods when there is hardly any fruit on the shelves.”
On the other hand, at some point all of the containers now subject to a much longer transit times or stuck elsewhere are going to arrive and then bunch-ups and a possible oversupply should be expected.
“It’s really bad and it’s gonna be like this for months to come. It’s not going to go away.”
The perils of the Red Sea and the drying Panama Canal offer a silver lining for South Africa’s fruit exports, opines a shipping agent on condition of anonymity.
“What’s happening in the world is good for South Africa in the sense that from India a lot of grapes aren’t getting to Europe, while the mess in the Panama Canal is hindering Chile’s exports to Europe and the Middle East.”
He adds: “In Europe the market is perfect for South Africa, the current volumes are fantastic and the grapes have high quality this year plus the market is empty.”
Middle East trade of delicate fruit complicated as vessels avoid Red Sea ports