Entrepreneurs Reveal the Impact of the Red Sea Conflict on Export and Import Rates

JAKARTA – The escalating conflict in the Red Sea has triggered an increase in logistics costs incurred by exporters for the distribution of goods. Meanwhile, importers have not seen a significant impact from geopolitical conditions in the Middle East. Chairman of the Association of Indonesian Export Companies (GPEI) Benny Soetrisno said that the increase in logistics costs due to the conflict had increased significantly compared to the costs before the Israeli-Hamas war escalated

Meanwhile, several processing industry sectors whose exports are experiencing pressure due to the hot conflict, namely textiles and apparel, furniture, electronics, automotive components, and crude palm oil (CPO) derivative products.

This condition is starting to be seen from the sluggish demand for exports to Europe due to the high cost of logistics transportation which chooses to avoid the Suez Canal route in the Sinai Peninsula, Egypt. Logistics transportation is said to prefer to rotate via the Cape of Good Hope in South Africa. As a result, shipping costs and times increase.

On the other hand, General Chair of the Indonesian National Importers Association (GINSI) Subandi said that the impact of the conflict in the Red Sea on importers was not yet significant. Because, there are still other alternative countries to replace the need for imports. He gave an example, fertilizer imports from Ukraine and Russia have not stopped because most of it has been replaced by domestic fertilizer production. “Including what President Joko Widodo said that there was a shortage of fertilizer is also incorrect, even though the quality is still below that of NPK, KNO3 and other fertilizers,” he concluded.

Source: https://ekonomi.bisnis.com