Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

IMF: Suez Canal Shipping Drops by Two-thirds

Fri 10 May 2024 | 10:00 PM
Taarek Refaat

The International Monetary Fund's PortWatch platform said on Thursday that shipping volumes through Egypt's Suez Canal decreased by two-thirds in April, year-on-year.

Egyptian media reported on Wednesday that the Suez Canal Authority’s revenues decreased by about $575.1 million in April compared to the same month in 2023, and attributed this to the geopolitical tensions witnessed by navigation in the Red Sea.

A study published by the United Nations today indicated that Egypt's revenues from tourism and the Suez Canal have already been affected since the start of the war in the Gaza Strip on October 7, according to the Arab World News Agency.

Egyptian Minister of Planning Hala el-Saed said that Suez Canal revenues decreased by 50% due to disruption of shipping traffic in the Red Sea.

The minister made this comment at the special meeting of the World Economic Forum in Riyadh. The Houthi attacks in Yemen on ships heading to Israel led to their sailing routes being diverted away from the Suez Canal corridor.

The Suez Canal is a major source of foreign currency, of which Egypt suffers a shortage, and the authorities have been seeking for years to boost its revenues, including by expanding the canal in 2015.

The Houthis have been attacking Israeli commercial ships or those in relations with Israel in the Red Sea for months in protest against the war waged by Israel against Gaza. Many commercial shipping companies are diverting their ships to other routes.

Suez Canal revenues constitute one of the most prominent sources of foreign exchange in Egypt. In the fiscal year 2022/23, the canal achieved financial revenues amounting to $9.4 billion, which is the highest annual revenue recorded, and an increase of 35% over the previous year, according to what the authority announced in June 2023.

It is worth noting that the latest International Monetary Fund report indicated that delivery times for global maritime shipments have increased by 10 days or more since the problems began in the Red Sea, through which 15% of global maritime trade passes.

The Fund stated that the volume of trade in the Suez Canal decreased by 50% in the first two months of the year 2024 compared to the same period last year, while the increase through the Cape of Good Hope was estimated at a rate of 74%.