European wheat shipments are bypassing the Suez Canal

European wheat vessels increasingly are being rerouted to avoid the Suez Canal amid rising security risks in the key trade lane. 

The share of shipments from the European Union, Ukraine and Russia using alternative routes on their way to Asia and Africa surged to 42% by mid-January from 8% last month, the World Trade Organization said in its wheat dashboard. The number of cargoes transiting via the Suez Canal is down by 40% from a year ago. 

Commodity carriers have been forced to bypass the Suez Canal, taking longer and more expensive routes to their destinations, because of Houthi militant attacks on merchant ships in the Red Sea. 

Grain markets have been upended by a number of shipping disruptions over the past couple of years including those caused by the war in Ukraine and low water levels at the Panama Canal. It’s a reminder of how fragile food supply chains can be. If disruptions worsen, they could stall the slump in food-commodity costs that had started to filter through to cheaper grocery bills.

Recent dashboard data indicate a slowdown in world seaborne wheat imports, with volumes through mid-January marginally lower than a year ago. Still, wheat trade has proved to be resilient, “with no major disruption noted in seaborne bulk shipments.”