Suez Canal revenues dip as ships avoid Red Sea

The Suez Canal is losing revenue as a result of Yemen’s Houthi rebels’ attacks on vessels in the waterway.

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The diversion of hundreds of vessels from the SE Canal to the Cape of Good Hope as a result of yemeni Hoy attacks in the Red Sea is putting further pressure on the Egyptian economy and causing A disruption of services the Hoy group’s attacks on the Red Sea shipping

Began in November 2023 purply in response to Israeli strikes on Gaza tensions escalated further this month after American and British air strikes targeted hothi sides in Yemen according to to the chairman of the seis Canal Authority usar Rabia the number of ships passing through the SE canal in the

First half of January dropped by 32% to 544 vessels from 777 last year meanwhile Revenue declined by 40% during the same period the sus Canal is a vital component of Egypt’s economy accounting for 2% of Egypt’s gross domestic product the importance of the canal to the North African country

Has been highlighted by the Egyptian prime minister to transform Egypt into a real Global logistical trade and industrial Hub we needed the required infrastructure from roads and all types of ports to transport product swiftly from one side of the world to the other the sus Canal project has achieved that

Goal and we all know this project has been the Cornerstone of our economic development in statements to local media the chairman of the SE Canal has moved to ease fears over the impact of the recent escalations on the future of the canal terming it a shortterm crisis related to a military conflict between

Israel and Palestine officials say they’re working on limiting the damage caused by the attacks the chairman of the S Canal announced they will be offering incentives and discounts on fees to some of the vessels that are still crossing the canal While others will be given discounts for maintenance work and

Bunkering services to encourage more ships to stay with us the alternative trade routs to the Su Canal are either around the Cape of Good Hope in South Africa which is much longer and more expensive or through air Freights which limits the amount of cargo that aircrafts can carry but being

A major source of hard currency for the cash strapped North African economy some experts believe the strategy should not be about seeking alternatives to the Seuss Canal but how to protect the waterway in the future there must be an international decision that makes it integral to secure all

Water stets any instability at any of the streets or waterways for example the seers and Panama canals will affect the global economies and populations therefore after this conflict ends there must be an International Security treaty to effectively protect all waterways and Straits from political confrontations for now officials in

Egypt are banking on a quick end to the conflict in Gaza to deescalate tensions in the region yesim for cgtn Cairo Egypt let’s delve further into this with Adele El mahui he joins us now in Cairo Adel always good to have you with us on the show now as just mentioned uh in

Yaser’s package authorities are saying they’re working on limiting uh the damage and also mitigating the impact of the ongoing tension on that red sea route such is uh of course offering repair services to ships that have been damaged talk to us about some of the measures they say they plant to

Take well basically what the SE Canal Authority is trying to do is trying to give a kind of guarantees for support at least for the ships that decide to go through the babon mandb straight south of the Red Sea all the way through the sus Canal uh but the services that have

Been in place including for example um introducing repair um services for just a a Greek ship that has been hit by a hosy mythy uh is just part of the regular services that the sou Canal already provides it already provides um emergency assistance refueling um packaging uh supplying with Logistics as

Well as uh repair uh for all the ships that pass through um the sus Canada but of course for these ships to get such Services they have to be in the Egyptian domestic Waters beside that the Egyptian um head of the Su Canada Authority usia has been in continuous talks virtually

And um in person with the heads of all the shipping firms the biggest of them in the world responsible for most of um the flow of ships into sus Canal trying to see how they can work together to ensure um the safety of the vessels quite quickly because uch it’s not just

That their safety is jeopardized by the Babel mandab um attack or instability because of the US and the UK strikes on the hois or of the hois attacks on the ships but also going all the way through the Cape of Good Hope means a longer duration in open Waters and sometimes a

Very um challenging weather conditions so um the insurance for these routs are higher the cost of crew and fuel are also higher so there is also an add-on expense it’s just basically which will be safe and less expensive that’s basically what these companies are trying to um reach

And that’s what the SE Canal Authority is trying to convince them with and of course that’s because the Su Canal is so critical uh to Egypt’s economy and we know the developments in the Red Sea they’re significant especially because they’re compounding an already a severe financial crisis uh in Egypt right now

So how is the state planning to work around this stabilize the economy in light of all this well the state has been actually on um this issue for several months basically throughout the past year but in recent months more so because of the crunch in the US dollar and the foreign currencies

In general it has seen a huge gap between the USD U the US Dollars and foreign foreign exchange rates in general in the official market and in the parallel Market with a gap almost doubling the figures traded in the official um Market market and therefore the government has been trying to have a

Strong um approach to that one of that is that imposing harsh measures on the parallel market trading trying to push everything to the official beside that the government is also working on the economy itself uh trying to make sure at least that the turbulences in the Red Sea will not affect Egypt’s food

Security for instance and the government has been raising its stock of strategic um grains and um Goods in general like uh we eat like um vegetable oils and beans to make sure that at least if this turbulence is at its peak and it stretches longer it does not affect one

Of the main security issues for Egypt which is uh food security other than that the economy and the evaluation of the Egyptian pound is definitely on the table there are also talks about reshuffling the business and economic um cabinet uh in the government and what is

Has been expected to be a following up in a cabinet reshuffle that follows president L cc’s re-election last month but what about the International Community Adele because there have been Whispers that Egypt is uh going back to the table with the IMF H and also working with the EU and other

Neighboring countries uh to ensure uh economic stability through funding what what do you know about that well um about the IMF uh and the the World Bank and general negotiations have been ongoing for months and um all the statements until the recent statements coming out from both organization are um saying that they

Will support um the Egyptian government um and their support should be guaranteed however it doesn’t seem that these statements have been translating into an actual agreement with additional billions of dollars of loans Egypt is trying to seek from both organizations that comes of course in terms of guarantees that the Egyptian government

Can provide them in terms of economic reform and how they will plan to spend um this loan interning that has always been um the um debate here between the two as for Europe Europe has also been um in negotiations with Egypt for years actually not because of the ongoing

Crisis that’s according to the Egyptian foreign minister who said that the ongoing negotiations are um estimate to at least target1 billion of loans from the European Union um and nothing has been concrete about it but Egypt also says that it aims to or hopes to get

Much more than this figure as well but the talks are still ongoing no breakthrough there there has been talks this week and because the foreign minister is in Europe um he has been talking with the European Union’s uh business economic uh officials in mitigation uh in terms of economic uh

Impact on Egypt through support of um encouraging more exports from Egypt into Europe and trying to channel more of European investments in the country seeking where exactly these funds should be following in Egypt and what kind of Revenue can be guaranteed in the next few years m