Manufacturers Plan to Hike Prices of Goods Over Importation Delays


Local manufacturers plan to hike prices of goods over importation delays owing to the continued attacks on commercial vessels along the Red Sea by the militant group Houthi.

Houthi, which stands in solidarity with Palestine’s Hamas militants, were accused of attacking vessels they argued were en route to Israel or had sworn allegiance to the Asian country headed by Prime Minister Benjamin Netanyahu. 

The Suez Canal, which is a major and one of the shortest freight routes, has since proven to be a tricky passageway affecting the imporatation of goods for Kenya and other East African countries which fully rely on it. 

As a result, shipping companies are rerouting or halting the transportation of goods or hike charges, which are passed on to local manufacturers. 

A petrol station attendant fueling a car in Nairobi.

Photo

Motorist Association of Kenya

As a result, many major shipping companies like MSC, Maersk, Hapag-Lloyd, and French shipment company CMA CGM have suspended operations in the Red Sea and have re-directed their cargo ships along the longer route around the tip of South Africa.

Longer routes have also caused delays in the arrival of imports as ships take at least an extra 10 days to reach their destination. 

On December 29, 2023, the UN Security Council held an emergency meeting where the UN Assistant Secretary-General Khaled Khiari warned of dire consequences if the continued attacks persisted. 

“United Nations continues to warn against the adverse political, security, economic and humanitarian repercussions of military escalation in the Red Sea and the risk of exacerbating regional tensions.”

The council also argued that vessels that had no connection to Israel were attacked. 

White House also released a joint statement issued by various governments condemning the attacks. Among them were the United States, Australia, Bahrain, Belgium, Canada, Denmark, Germany, Italy, Japan, Netherlands, New Zealand, the Republic of Korea, Singapore, and the United Kingdom.

“We warn the Houthis against further attacks. Ongoing Houthi attacks in the Red Sea are illegal, unacceptable, and profoundly destabilizing. Attacks on vessels, including commercial vessels, using unmanned aerial vehicles, small boats, and missiles, including the first use of anti-ship ballistic missiles against such vessels, are a direct threat to the freedom of navigation that serves as the bedrock of global trade in one of the world’s most critical waterways.

We call for the immediate end of these illegal attacks and the release of unlawfully detained vessels and crews.  The Houthis will bear the responsibility of the consequences should they continue to threaten lives, the global economy, and the free flow of commerce in the region’s critical waterways,” the White House warned. 

Back home, in November last year, Energy CS Davis Chirchir warned that fuel prices in Kenya may at one time increase to up to Ksh300 per litre owing to the Israel – Hamas war. 

A freight ship

Photo

Freight shippers

“I read an article in the Financial Times the other day that because of the Hamas and Israeli War, the international prices could go up to USD150, and that would literally mean our products going to a high of Ksh300 at the pump,” CS Chirchir stated while appearing before the National Dialogue Committee (NDC).

However, global fuel prices dropped, offering Kenyans hope that the commodity may trade below Ksh212.36 for petrol, Ksh201.47 for diesel, and Ksh199.05 for Kerosene per litre prices set for December last year to January this year.

The Energy and Petroleum Regulatory Authority (EPRA) is expected to release the January to February pump prices on January 14. 





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