Red Sea shipping disruption threatens Maldives supplies
"The indirect impact will be very big in the future if this goes on," an official of STO.
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By
Ahmed Naif
Large shipping lines have now moved away from the Red Sea strait in the wake of attacks on Israeli-related ships by the Houthis, which control large swathes of Yemen in the Red Sea. Many vessels that used to enter the Red Sea and pass through the Suez Canal have now opted to travel far away from Yemen and dock in the Cape of Good Hope in Africa before heading to their destinations.
The global shipping industry is already experiencing a major impact on the change in shipping routes. Freight costs are now rising due to longer ship routes, higher shipping fees and higher insurance charges.
What will happen to Maldives, which is dependent on imports?
According to Ahmed Nasir, owner of Lily Group, which imports a lot of goods from abroad and also runs a shipping line called Lily Shipping, the closure of the Red Sea will have little direct impact on Maldives. One reason, he said, is that most of the goods are imported from Dubai, India and some Asian countries. However, the Red Sea is an important route connecting Asia and Europe and the prices of goods imported from Europe will change, he said.
He added that although there is no increase in shipping prices at the moment, the risk is very high in the future.
"There is a lot of risk to the country as well; of future problems such as rising shipping costs. There are also Dubai locations that bring goods directly from Europe and then to Maldives from there. However, if the price changes, it will go up in the market here at this stage," Nasir said.
An official of STO, which imports many basic commodities to Maldives, said the price of goods from Asian countries will not increase but the price of goods from Turkey will be higher. In addition, changes in shipping schedules and delays will incur additional costs, he said.
He added that Maldives imports oil from the Middle East and the cost of importing oil and the risk of oil price increases will increase day by day.
"The indirect impact will be very big in the future if this goes on. The increase in insurance premiums and the lengthening of routes will have a long-term impact," the official said.
