Analyst sees no major ag impacts from blocked Suez Canal yet
A broker and risk management advisor keeping a close eye on the Suez Canal blockage says there are no major ag market impacts yet. Dan Basse with AgResource says, “We’re watching it carefully for wheat. Of course, that would be an area that you would start to look for wheat or flour from the Black Sea into North Africa, but at least at the moment, we’re not seeing any real dilemma or problems.”
Basse tells Brownfield with hundreds of ships unable to use the canal while crews try to dislodge and re-float the Ever Given, those operators are losing money. “World freight rates though, as you look at it, are nearing a record high, so you know, any demurrage time that a vessel is sitting in that canal is costing vessel owners dearly.”
Basse says delayed fertilizer shipments heading for the U.S. won’t be an issue this growing season. “Those vessels would be offloading either in Nola (New Orleans, Louisiana) or down in Florida and you know, that probably would be several weeks away but it’s a process of restocking for the upcoming 2022 campaign.”
Basse’s contacts have told him it might take a week to ten days to clear the Suez Canal for normal ship traffic.
The Ever Given is a 13-hundred-foot container ship leased by Evergreen that was traveling from southeast Asia to the Netherlands when it lost steering in a windstorm Tuesday.
The 120-mile-long canal is very narrow and connects Suez, Egypt on the Red Sea with Port Said, Egypt on the Mediterranean Sea, saving thousands of miles and more than 15 days of travel for most ships. Reports from Egypt say some smaller ships have been able to use the older, smaller canal channel.