Western Cape exporters and agricultural stakeholders are feeling the weight of logistical disruptions and rising input costs arising from the escalating crisis in the Middle East.
Jacques Moolman, president of the Cape Chamber of Commerce and Industry, confirmed ongoing cargo disruptions at Cape Town Port, with some shipments to or transiting the Middle East now on hold until further notice.
“We can confirm that on Wednesday, a major international shipping line issued instructions to Cape Town shipping agents to remove and unpack their containers already packed for export at the Cape Town Container Terminal,” Moolman said.
The timing of the conflict is particularly precarious for an agricultural sector currently on the brink of its main grain planting season, according to Agri Western Cape. The sector now faces a spike in diesel and fertiliser costs – two critical inputs for farming operations.
Exporters Western Cape reports that the current conflict has already had knock-on effects on freight costs, fuel prices and supply chains.
The Middle East – and the UAE in particular – is a growth market for Western Cape fruit, according to the organisation. Terry Gale, chairperson of Exporters Western Cape, said the immediate challenge now facing exporters is what happens to containers that are already on the water or in transit to these markets.
Gale is calling for close engagement between government and industry to mitigate potential negative impacts.
The tourism sector faces both potential negative and positive impacts, according to Lesego Majatladi, vice chairperson of the Cape Chamber’s Tourism and Hospitality Portfolio. He said disrupted routes may cause travellers to reconsider long-haul trips, particularly as Dubai serves as a global interchange.
“However, the Western Cape may also benefit from being viewed as a stable and safe destination,” Majatladi said. The challenge for the region will be to strengthen its global positioning as a secure alternative amidst the global travel interchange uncertainty.
Vanessa Davidson, vice chairperson of the Oceans Economy Portfolio, said the risk is no longer theoretical. “One marine manufacturing company has already cancelled attendance at the Korean International Boat Show due to airspace closures,” she said.
Major shipping lines, including Maersk and Hapag-Lloyd, have structurally rerouted vessels around the Cape of Good Hope to avoid the escalating conflict in the Middle East and the closure of the Strait of Hormuz. This shift has resulted in a 112% surge in Cape diversions as of early March, adding roughly 10 to 14 days to transit times and significantly increasing fuel and insurance costs for global trade.
Moolman said the Cape Chamber will continue to closely monitor the escalating economic impact as events unfold.
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