As concerns grow over the prolonged blockage of waterway in the Suez Canal in Egypt, prices of not only petrol and diesel but also coffee may be in for a rise. A huge container ship, which had run aground, continued to block traffic in the Suez Canal, one of the world’s busiest waterways, and the shortest shipping route between Europe and Asia.
Reports said ships of Robusta coffee — used by Nescafe — have got caught up in the blockage.
Panama’s Ever Given container ship, which supplies goods between Asia and Europe, ran aground on Tuesday, leading to blockage of the Suez Canal. The giant ship laden with oil containers immediately disrupted traffic.
Efforts have begun to refloat Ever Given and an attempt to tug it and complete the operation will resume during a higher tide later on Monday morning, the Suez Canal Authority has said.
On Friday, efforts to remove the blockage had failed, according to Bernhard Schulte Shipmanagement (BSM), which is the technical manager of the Ever Given.
Egyptian authorities have not permitted media to access the site where the ship is located. The ship’s crew includes 25 Indians.
The traffic blockage in the Suez Canal has affected Europe the most, but is expected to impact the rest of the world too due to disruptions in the supply of edible goods that are transported through this route. The Suez Canal is used for about 12 trades.
The delay in supply led to a 2.8 per cent surge in Robusta coffee futures. On Friday, the gap between May and July futures of the commodity increased by 30 per cent.
Analysts say any further delay in the removal of disruptions on the route might push coffee futures even higher.
The US has offered to help Egyptian authorities to clear the blockage. “We have equipment and capacity that most countries don’t have. And we are seeing what help we can be,” US President Joe Biden said on Friday in Delaware.
Meanwhile, international crude oil prices cooled off slightly after four sessions of wild swings, as efforts continued to dig out the giant container ship clogging the Suez Canal and little new emerged in the demand picture.
Brent oil was down 18 cents, or 0.3 per cent, at $64.39 per barrel on Monday, and the West Texas Intermediate (WTI) contract down 22 cents, or 0.4 per cent, to $60.75 per barrel. Crude oil prices had jumped more than 4 per cent on Friday, as traders and investors tried to weigh the impact of the blockage of a key trade transit point and the broader effect of lockdowns to stop coronavirus infections.