2 weeks ago

Hormuz crisis drives up costs, delays Indian exporter shipments

Hormuz crisis drives up costs, delays Indian exporter shipments
Hormuz crisis raises costs for Indian exporter, delays shipments to Africa · firstpost.com

Ships carry things we buy across the ocean, and many of them sail through a narrow sea passage called the Strait of Hormuz.

Lately, that area has become unsafe, so ships are taking different, longer routes.

This makes shipping much more expensive and much slower.

A company in India called Nuflower makes special food for children who do not get enough to eat.

Its shipments to Africa that used to take a little over a month now take more than three months.

Nuflower also has to pay more for the ingredients it needs, like peanuts, milk and oil.

The company cannot raise prices much because the food is meant for malnourished children and it competes in a very cost-sensitive market.

Some of Nuflower's customers in Europe and Africa are now buying from other countries instead.

The Indian government is trying to help with a special programme called RELIEF.

For now, Nuflower hopes the problems will end soon so food can still reach children on time.

Key facts

Affected company
Nuflower, Indian nutrition products exporter
Raw material and packaging cost rise
Up to 30 per cent
Mundra-Cameroon transit time
37 days to about 95 days
Mundra-Durban transit time
About 27 days to more than 90 days
Freight rate surges
Sierra Leone +115%, Ashdod +68.75%, Guatemala +151.16%
Vessels through Strait of Hormuz
8 tracked on Tuesday vs ~12 ten-day average; ~130-140 before disruption
IMF energy estimate
25-30% of global oil and ~20% of LNG pass through Hormuz
RELIEF scheme outlay
Rs 497 crore, launched in March

Quotes

Akshat Khandelwal

Founder and CEO of Nuflower, an Indian nutrition product exporter

“The increase in major raw material prices remains the single biggest additional absolute cost our company is facing right now.”
firstpost.com
“It's a very delicate balance for us.”
firstpost.com

Sources

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