The United Nations Conference on Trade and Development (UNCTAD) has raised a serious concern about the ongoing crisis in the Red Sea shipping route stating that ongoing crisis would particularly hurt developing nations.It is worth to be noted here that this is one of the vital waterways, which connects Europe with Asia and Africa and has been disrupted by recent attacks against vessels, mainly attributed to the Houthi rebels in Yemen. This disruption has far-reaching consequences for global trade and supply chains.Red Sea, Black Sea and Panama Canal: @UNs trade & development body raises alarm on global trade disruptions.@UNCTAD warns that escalating attacks on ships in the Red Sea are adding strain to shipping routes already hit by conflict and climate change. https://t.co/eO47oAIP2S pic.twitter.com/YnmopB6PII— UNCTAD, the UN trade & development body (@UNCTAD) January 26, 2024Global Implications: Increases In Energy And Food PricesUNCTAD though one of its official blog posts on January 26, underscored the far-reaching economic implications of these disruptions. The organisation highlighted the prolonged interruptions, particularly in container shipping that pose a direct threat to global supply chains, raising the risk of delayed deliveries and higher costs.Apart from this, energy prices are witnessing a surge as gas transits are discontinued, directly impacting energy supplies, especially in Europe.“The crisis is also impacting global food prices, with longer distances and higher freight rates potentially cascading into increased costs. Disruptions in grain shipments from Europe, the Russian Federation and Ukraine pose risks to global food security, affecting consumers and lowering the prices paid to producers,” UNCTAD said in a statement.Image Source: UNCTAD (X)Impact And Need For Collective Action“Developing countries are particularly vulnerable to these disruptions, and UNCTAD remains vigilant in monitoring the evolving situation,” UNCTADs head of trade logistics, Jan Hoffmann said. The organization also underlined how crucial it is that the shipping sector quickly adjust to the rapidly changing dynamics of global trade and that strong international collaboration be maintained.The present issues highlight the susceptibility of commerce to geopolitical unrest and climate-related problems, necessitating group efforts to find sustainable solutions, particularly to aid the nations most susceptible to these shocks.Disruptions in the Black Sea and Panama and Suez CanalsThe Suez Canal, a critical waterway connecting the Mediterranean Sea to the Red Sea, handled approximately 12% to 15% of global trade in 2023. UNCTAD estimates that the trade volume going through the Suez Canal decreased by 42% over the last two months.The Red Sea crisis highlights the vulnerability of global trade to unforeseen events and the importance of maintaining open and secure shipping routes. Continued monitoring and international cooperation are necessary to mitigate the crisiss impact and find long-term solutions for the safe and efficient movement of goods across the world.
