The location of Egypt makes it a central hub for international trade. The 120-mile mile Suez Canal passing through it essentially connects the Indian Ocean and the Mediterranean Sea and subsequently emerges as a vital passage for ships that are seeking to travel between Asia and Europe without having to circumnavigate Africa in the process. Usually, the processes of overseas bank transfer like FNB international payments and CIBC international transfer are used by companies engaging in foreign trade in the region.
Importance of Suez Canal of Egypt
Approximately 80% of the volume of foreign trade in the world is transported by sea, as per the United Nations. The core purpose of the Suez Canal of Egypt is to shorten transportation routes for global supply chains and help ships to save thousands of miles in their journeys. This factor has made it among the most trafficked shipping lanes in the world. Around 12% of the trade volume of the planet makes its way through Suez.
However, currently, the Suez Canal trade route is blocked by a container ship that is even taller than the Eiffel Tower. This container ship is lodged sideways in the canal and is blocking all other ships from passing. While consistent efforts are being made to remove this ship, doing so can take quite a while. This ship was blown off its course by strong winds, and caused quite damage to the canal as well, which had to be repaired.
Coffee shortage expected due to Suez Canal blockage
Among other things, this Suez Canal crisis could lead to a shortage in instant coffee supply. Apart from curbing shipments of crude oil and liquefied natural gas, the vessel blocking this prominent maritime chokepoint has also blocked containers of robusta coffee. This type of coffee is used to make the popular Nescafe. All of the beans from East Africa and Asia, which house two of the top robusta producers of the planet, flow to Europe via the Suez. As a result, now coffee traders have to scramble to supply their clients in Europe.
While the Suez Canal waterway is more popular for the role it plays in the energy market than agricultural commodities like coffee, the fact that some of the prime producers of robusta coffee are using this route cannot be ignored. Coffee roasters in the region had already been struggling to get robusta coffee from Vietnam, which is its largest producer in the world, and the Suez Canal blockage would make the situation all the more problematic.
