Egypt’s Suez Canal revenues plunge

Must read

Revenues generated by Egypt’s Suez Canal saw a 40% year-on-year decline in the first eleven days of 2024, canal authority head Osama Rabie said earlier this week.

Ship traffic through the maritime artery connecting the Mediterranean and the Red Sea dropped 30% between January 1 and January 11 compared to the same period a year prior, the official noted, speaking on a talk show Thursday night.

According to Rabie, the number of ships that have moved through the Suez Canal fell to 544 in the first eleven days of the current year compared to 777 in the equivalent period of 2023.

He pointed out that the period of cargo transportation has increased by at least two weeks while costs for the delivery of goods and insurance were also growing.

“The Cape of Good Hope is not a valid and safe route for ships to cross at this time, especially in light of bad weather and the long duration of the crossing,” the official said, adding that navigating around the African continent adds up to 15 days compared to passing through the Suez Canal.

The canal is a major source of foreign currency for Egypt. In recent years, the country’s government has been trying hard to increase revenues generated by allowing commercial vessels through it. The route was expanded in 2015, with further enlargement underway.

In June, Egypt’s Suez Canal posted an all-time high annual revenue of $9.4 billion in the fiscal year 2022-2023, up from $7 billion recorded a year earlier. Back then, 25,887 ships carrying 1.5 billion tons of cargo passed through the route, marking the highest amount on record.

However, at the end of last year, cargo traffic through one of the world’s vital trade arteries dropped 28% due to the attacks carried out by Yemen-based Houthis against commercial ships in the Red Sea. The assaults became more frequent after the rebels instituted a de facto blockade through the Red Sea and the Suez Canal. They have been attacking vessels thought to be linked to Israel in what they say is a show of solidarity with the Palestinians following the escalation of hostilities in Gaza.

For more stories on economy & finance visit RT’s business section

More articles

Latest article