New Zealand’s seafood sector is beginning to feel the ripple effects of the latest conflict in the Middle East, with disrupted shipping routes and rapidly rising fuel costs creating significant challenges for exporters.
Seafood New Zealand Chief Executive Lisa Futschek says the instability in the region is creating uncertainty across the entire supply chain.
“Unfortunately, the current conflict is disrupting normal shipping routes and port access, which creates a lot of problems for our exporters,” says Futschek.
“The Middle East is a growing market for New Zealand seafood, particularly for premium products. Seafood exports to the region have been modest at around $20 million per annum, but with recent trade deals there’s a real opportunity for growth.”
The Free Trade Agreement concluded last year with the Gulf Cooperation Council allows seafood exports to enter those countries in a tariff-free environment.
Tony Hazlett, Chief Executive of Talley’s, says exporters are already dealing with real-time disruptions to shipments headed for the region.
“We have product currently in transit that was originally bound for ports in the Middle East, which has since had to be redirected to different arrival ports,” Hazlett says.
“That creates a lot of challenges for us, from additional freight costs to uncertainty about whether the product can reach the final customer in time.
“In some situations, if the product cannot be delivered, we will have no choice but to return the shipment back to New Zealand. It looks like this will be the case for some of our product already en route.”
At the same time, the conflict has pushed up global marine fuel prices, adding further pressure on seafood operators already managing tight margins.
“The cost of marine fuel has increased sharply since the conflict escalated, which directly impacts the cost of operations in New Zealand,” Futschek says.
“These are costs the industry is having to absorb in the short term, but inevitably they will place pressure on prices that consumers see.”
Despite the disruption, the industry remains committed to maintaining supply relationships with the help of the Government.
“We’re hopeful that stability returns soon but, in the meantime, our officials have been extremely responsive and supportive in assisting the industry with trade access challenges,” Futschek says.
ENDS
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