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Could the Suez Canal blockage affect Australian coffee supply?

Could the Suez Canal blockage affect Australian coffee supply?

A blockage in the Suez Canal over the past week will have little effect on Australian supply chains, including coffee, experts say.

The 400-metre-long container ship Ever Green became stuck diagonally across the single lane stretch in the south end of the canal on 23 March and remained that way until 29 March.

Flavio Macau, Vice President at Australasian Supply Chain Institutes’ (ASCI) WA Chapter and Supply Chain Management Expert at Edith Cowan University, says the impact on Australian supply chains would be minimal.

“The Suez Canal is mostly used for commerce between Asia and Europe, so in Europe you may see a shortage of products like cars, and in China, a shortage of oil,” he told MHD Supply Chain News.

“Our main commercial partner is China and the United States, and neither of them require the use of that canal.”

A shortage of coffee is also possible for Europe, with Bloomberg reporting several containerships carrying Robusta coffee from Vietnam have been delayed by the blockage.

Hundreds of large container ships have been backed up at either end of the canal, waiting to get through. These vessels face delays of two to three days if the Ever Green is freed soon. Otherwise, they may be stuck outside the canal for five to seven days.

Twelve per cent of global trade passes through the Suez Canal – particularly between Asia and Europe. Only two major Robusta producers, Brazil and the Ivory Coast, don’t use the canal.

The possible shortage of Vietnamese Robusta coffee in Europe has led to a small increase in its price on commodity exchanges in London.

Kirk Coningham, CEO at Australian Logistics Council, told MHD Supply Chain News the impact of the blockage on Australian supply chains will be there, but it won’t be significant.

“Global supply chains are intricately connected, so there will likely be some ripple effect from this, not the least of which is the potential impact on global fuel supply and costs,” he said.

Image: Suez Canal Authority

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