The ongoing conflict in the Middle East, particularly involving Iran, Israel, and the United States, is causing significant disruptions in global trade, especially in the coffee industry. Recent military actions, including US strikes on Iranian nuclear facilities and Iranian missile retaliation, have led to increased shipping challenges. This situation is affecting how coffee is transported worldwide, particularly from East Africa and Asia.
• The Suez Canal, a vital shipping route for coffee, has seen disruptions due to attacks by Iranian-backed Houthi rebels.
• Ships are now rerouting around the Cape of Good Hope, adding about 10 days to transit times and increasing shipping costs.
• A potential return to Suez Canal routes by late 2025 or early 2026 is uncertain due to escalating tensions and high insurance premiums.
• An embargo on the Strait of Hormuz could further raise shipping prices, impacting coffee importers significantly.
Understanding these developments is crucial for stakeholders in the coffee industry. The rising costs and delays can affect pricing and availability, ultimately impacting consumers. The situation highlights the interconnectedness of global trade and regional conflicts, stressing the need for ongoing monitoring.
Enjoying the read? Subscribe for free to one of the fastest-growing newsletters and get weekly coffee news (TL;DR updates) delivered right to your inbox.