USDA: Shipping disruptions on the Red Sea could impact grain trade

Ships that previously would have gone through the Suez Canal in Egypt are now being diverted below and around South Africa due to military tensions.

As U.S. Dept. of Agriculture (USDA) analysts prepare February’s WASDE report, they are keeping tabs on the Red Sea and how shipping struggles could affect the grain market.

USDA Outlook Board Chairman Mark Jekanowski shares the potential impact of delays along the major waterway separating Asia and Africa:

“You know, that can have implications for overall grain trade and potentially even shift business to the U.S., where it could make U.S. supplies more competitive to certain global markets just based on logistical advantages.”
Mark Jekanowski, USDA Outlook Board Chairman

Ships that previously would have gone through the Suez Canal in Egypt are now being diverted below and around South Africa due to military tensions.

The USA Dry Pea and Lentil Council and the American Pulse Association expect disruptions to continue — especially as 65% of pulses are exported out of the U.S. — and lead to increased freight costs. The two groups also shared with the Federal Maritime Commission that food aid shipments have almost completely stopped going into that region.

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