South African exports to Saudi Arabia and Jordan are being affected by the current situation in Jordan and Saudi Arabia are affected by the situation in Red Sea. Some exporters are still using Red Sea ports like Jeddah and King Abdullah Port (necessitating a US Navy escort and “hectic” insurance rates when entering Red Sea waters), several others have told FreshPlaza that they have no choice except to transfer their cargo into the smaller Saudi ports of Dammam located in Dammam in the Persian Gulf.
It is unclear if Dammam has the capacity to manage the volume of work that is coming at them.
“The Red Sea impact on South Africa comes down to delicate fruits: stonefruit, grapes and fruit that cannot be shipped for long periods of time. This is putting pressure on all parties, and creates pressure on market,” says an exporter who requested not to be identified, due to the sensitive nature of the matter.
Based on the comments of clients in his Middle East, that South Africa’s pro Palestinian stance has won its country allies in and around the Arab world.
These countries may run out of fruits, says he in addition: “Even in Europe you’re likely to experience periods where there’s not much fruit available.”
But it is likely that at some point, the entire container currently in the process of undergoing a extended transit period or stranded in other locations will be delivered in a massive way, and the formation of the possibility of an oversupply is to be expected.
“It’s very bad and is going to be this way for a long time. This won’t go out of sight.”
The dangers of Red Sea and the drying Panama Canal offer a silver benefit for South Africa’s lucrative exports of fruit, says an agent for shipping on the condition of confidentiality.
“What’s going on in the world can be beneficial to South Africa in the sense that, from India many grapes haven’t made it through to Europe while the chaos of the Panama Canal is hindering Chile’s exports to Europe as well as in the Middle East.”
The official adds: “In Europe the market is ideal to South Africa, the current numbers are amazing and the grapes are good quality this year. Plus, there is no demand.”