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Trade in the Suez Canal Fell by 50% - Qpidi

The IMF announced that trade in the Suez Canal decreased by 50% annually in the first two months of the year. Noting that ships have turned towards the Cape of Good Hope, the IMF estimated that trade volume there increased by 74% in the same period.



International Monetary Fund (IMF) highlighted the disruptions in global trade caused by attacks in the Red Sea. The article mentioned that the global trade faced significant challenges due to disturbances in two critical shipping routes over the past few months.


Suez Canal Traffic Decrease

It was reported that attacks on ships passing through the Red Sea reduced traffic in the Suez Canal, which normally accommodates about 15% of global maritime trade and serves as the shortest sea route between Asia and Europe. This has led to a decrease in the canal's traffic.


Shift Towards Cape of Good Hope

In response, some shipping companies have rerouted their vessels towards the Cape of Good Hope. This change has extended delivery times by an average of 10 days or more, adversely affecting companies with limited stock. The trade volume in the Suez Canal during the first two months of the year dropped by 50% compared to the same period last year, while trade volume at the Cape of Good Hope is estimated to have increased by 74%.


Panama Canal Concerns

The article also raised alarms over the Panama Canal, where severe drought has forced authorities to implement restrictions significantly reducing daily ship passages since last October. This has slowed maritime trade at this key point, which accommodates about 5% of global sea trade, with trade volume in the Panama Canal nearly falling by 32% compared to last year.


Global Shipping Trends

The first two months of the year saw a 6.7% decrease in trips made to 70 ports in Sub-Saharan Africa compared to the previous year, and a 5.3% decrease in the European Union, Middle East, and Central Asia. These declines likely reflect the temporary effects of extended shipping times.


IMF's Warning

The IMF's blog post warns that if these disruptions continue, they could pose temporary barriers to affected countries' supply chains and potentially exert upward pressure on inflation due to partly high shipping costs.

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