Meat & Livestock News

UK Agricultural Exports Face Shipping Challenges

In recent developments, New Zealand’s dairy exports are experiencing significant delays in reaching international markets. These delays, extending up to three weeks, are due to diversions around the Cape of Good Hope and capacity restrictions at the Panama Canal.

Avoiding Conflict Zones and Canal Delays

Fonterra’s director of global supply chain, Santiago Aon, highlighted that to avoid military tensions in the Red Sea, carriers are rerouting around the Cape of Good Hope. This diversion adds 14-17 days to transit times for Fonterra’s shipments. The Red Sea tensions, involving Houthi rebel attacks on cargo ships, have led to a drastic reduction in container ships passing through the area.

Impact on Dairy and Meat Sectors

While the dairy sector is feeling the brunt of these delays, the meat industry, particularly those targeting the UK Easter trade, is also on alert. The Meat Industry Association noted concerns about potential impacts on chilled beef and lamb exports, though significant delays have not yet been reported.

Panama Canal’s Drought-Induced Restrictions

The Panama Canal, another crucial shipping route, is facing its own challenges. Severe drought conditions, exacerbated by El Niño, have led to water shortages necessary for operating the canal’s locks. This has resulted in reduced ship transits and new drought restrictions, causing some vessels to offload and truck cargo across the country for reloading.

Broader Implications for Trade

These disruptions raise concerns about the potential impact on upcoming harvests, like apples and kiwifruits, which require storage and have limited shelf life. The Ministry of Foreign Affairs and Trade is yet to provide data on the full impact of these delays on New Zealand trade. However, prolonged disruptions could lead to higher transport costs and further delays, particularly for perishable items.

In summary, New Zealand’s agricultural exports are currently navigating a challenging landscape of global shipping disruptions. These include rerouting to avoid conflict zones and dealing with capacity restrictions at the Panama Canal, both of which are causing significant delays and potential economic impacts.