Heat along the route of the Red Sea is  taking a toll on Pakistan as industry and export shipments,  meant for Europe and the US, are seeing a massive surge in costs. Transit time has increased to 50 days from 30 days. A high mark-up is also creating a big hurdle.  Maritime attacks by Yemen’s Houthis   are disrupting  trade this week on the main East-West route that makes up about 12% of global shipping traffic.   Rather than use the key route between Asia and European markets, some shipping companies are now taking a major detour around southern Africa.    Red Sea trade disruption hits energy sector.      The first sector to receive the hit in Pakistan was perishables — fruits and vegetables.   Pakistan has markets for its mandarin (Kinnows) in some areas in Europe.      The route has changed from the Red Sea via Suez Canal to an alternative via Cape of Good Hope that has increased distance by some 3,500 kilometers.   Ahmed said since the shipments have not yet been delivered, it remains to be seen how their quality would have been affected since travel time increased by around 66%.      The coming season is of potatoes. If the crisis in the Red Sea continues, exporters may opt out of exporting.  It’s not just fruits that are being affected. Textile and rice shipments are also facing stress.     Exporters have been incurring losses as they were honouring orders when they had assumed freight charges of $750.     After the logistical nightmare, shipping companies have jacked up freight charges to around $1,800, a massive 140% hike.      Rice is mainly exported to East Africa and Europe through this route.      Data shared by the official revealed 2.3 million tons of rice worth $1.5 billion has been exported in the six months of FY24 (July-December).Apart from transit and freight charges, insurance companies have also increased additional war risk insurance premiums.      The textile sector was facing similar issues.      The EU is the most crucial export destination for Pakistan, with over one-fourth of the country’s exports heading to the European market. Pakistan has a $4-billion trade surplus with the EU with exports standing at a significant $9.3 billion in FY21. (ICE ISLAMABAD)

Fonte notizia: business recorder