InvestIdeas

Chaos in the Red Sea is starting to disrupt shipments of produce from coffee to fruit — and threatening to halt a slowdown in food inflation that brought some relief to strained consumers.

Unlike gas, oil and consumer goods cargoes that have also been affected, lengthier shipping times risk making perishable foods unsellable.

Italian exporters fear kiwi and citrus fruits will spoil on the way, Chinese ginger is getting pricier and some African coffee cargoes were briefly delayed. Grain is being diverted from the Suez Canal and a livestock carrier bound for the Middle East has changed course.

The shipping issues are also a concern for Europe’s exports of products like pork, dairy and wine, as well as imports of tea, spices and poultry.

UK grocery giant Tesco Plc has warned that shipping disruptions could lead to inflation on some goods and J Sainsbury Plc is working with the government to cope with delays.

Fresh ginger prices have jumped more than a third since December.

Spiking ocean shipping rates, vessel backups at seaports and empty container shortages — issues that wreaked havoc on global trade during the Covid pandemic supply-chain crisis — are back as the industry enters its busy season.

Ships on the China to Europe and China to US East Coast lanes are instead sailing around Africa, cascading disruptions and higher costs across supply chains that rely on ocean vessels that transport about 80% of international trade volume.

Port congestion in China and other Asian countries is pressuring an over-stretched container shipping market that is already reeling from shortages in vessel space and equipment.

Singapore, the world's second-busiest container port, is now experiencing severe delays. Some ships are skipping calls there, upending schedules at downstream ports.

Empty containers also are piling up in Sri Lanka and the United Arab Emirates, while China and Singapore are reporting shortages.