Crisis at sea: Attacks threaten 1.31 trillion baht trade route
Thailand‘s 1.31 trillion baht worth of exports to Europe and the Middle East hangs in the balance as armed militants threaten a vital trade route.
Expert warnings of a trade catastrophe are ringing alarm bells worldwide.
Amid escalating conflicts in the Red Sea, Associate Professor Aat Pisanwanich, an international economics guru, has raised the red flag on the severe consequences for Thailand’s exports.
“It’s a perfect storm, with shipping firms forced into costly detours, potentially crippling our trade to Europe and the Middle East.”
Pisanwanich highlighted the critical role of the Suez Canal, where 15% of global shipping traffic navigates. With an estimated US$3 trillion (approximately 104 million baht) of the world’s US$25 trillion trade relying on this route, the stakes are high. Last year alone, Thailand’s exports to 15 Middle Eastern countries and 27 European Union nations totalled a staggering 1.31 trillion baht.
Thai exports, ranging from farm products to car parts, face disruption as Houthi rebels in Yemen target vessels, escalating tensions linked to the Israel-Hamas conflict.
“If the war broadens to involve more militant groups, we could be on the brink of a global economic crisis.”
As Houthi attacks intensify, the US deploys a naval protection force in the Red Sea, aiming to safeguard merchant shipping. Chaichan Chareonsuk, Chairman of the Thai National Shippers’ Council, reveals a harrowing decrease in ship traffic through the Bab El-Mandeb Strait, a crucial passage for 100 to 120 vessels daily, reported The Nation.
Chaichan contemplates the worst-case scenario – a closure of the Suez Canal.
“Should it come to that, brace for more bad news in global trade and economy.”
If shipping vessels reroute south of Africa, the transport time between Asia and Europe could extend by 10 to 15 days, accompanied by a hefty US$1,500 per container increase in freight charges. The spectre of a disrupted supply chain looms large.
Associate Professor Aat issues a rallying cry to Thai exporters, urging them to stay vigilant and plan for the worst.
