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Red Sea attacks likely to impact Turkish consumers

Recent attacks by Yemen’s Houthi group on commercial vessels in the Red Sea could potentially hit Turkish consumers through rising prices along with disruptions in the global maritime trade, Turkish industry insiders said.

Many sectors are expected to be affected by the crisis, and prices of goods are likely to go up in Türkiye, a country already plagued by high inflation for years.

Adil Pelister, president of Istanbul Chemicals and Products Exporters Association, said in a statement last week that the chaos in the Red Sea has already started to affect the sector.

“The delivery of the products planned to arrive in January has been postponed to the end of the month. This delay in the supply of intermediate goods and raw materials needed by our industry may also cause production delays,” he said.

He emphasized that the cost to the end products of the rising costs of freight shipping is due to hit businesses in need of imported goods and therefore Turkish customers.

“This increase in freight costs may negatively affect our companies on a foreign currency basis, especially since our exporters cannot change prices in contracted sales, the cost burden may remain on our exporters,” this industrialist added.

Server Yanar, the manager of a logistics company based in Istanbul, Türkiye’s industry and finance hub, said that ultimately the increasing freight cost would be reflected in local consumers.

“This is the biggest shipping upheaval since the COVID-19 pandemic. Logistics companies are diverting to longer routes to send their goods to their clients and this will inevitably cost more and have financial consequences,” he told Xinhua.

He added that consumers will feel the impact of this turmoil in the coming months.

For his part, Basaran Bayrak, the head of the Turkish Chamber of Shipping, echoed the worrying forecasts.

“Rising import costs will inevitably impact final goods. The prices of import-dependent goods will increase between 10-20 percent in the local market,” he said in remarks to exporters last week in Istanbul.

Bayrak noted that production activities in Türkiye are dependent on imported goods and Türkiye buys intermediate goods from Far Eastern countries.

Annual inflation in Türkiye rose to 64.8 percent in December 2023, the highest since November 2022, according to official data released on Wednesday, while price rises are expected to peak at 70 percent in May before decelerating, according to official forecasts.

The Houthi group spokesman announced the militia launched on Wednesday missiles targeting a cargo ship in the Red Sea, confirming they will continue to prevent Israeli ships or those heading to Israel from navigating in the Red Sea and Arab Sea until food and medicine aid are allowed to enter the Palestinian Gaza Strip. ■

Famagusta Gazette