Whilst the Iran-US conflict is hopefully drawing to a close, we are seeing the impact on freight rates continue and even escalate, particularly from Asian markets. It is probably further fuelled by supply chains filling with stock for the Christmas season in EU/UK/USA. The reduction in oil prices has yet to filter through to haulage and sea freight rates.

Whilst the impact of the Iran-USA conflict continues to disrupt supply chains in unexpected ways and freight rates continue to edge upwards, partly due to the conflict abut also seasonal demand from Far East origins the impact has so far been limited for our customers. We are in the ‘between season’ now when old crops are mainly designated and new crops carry buyers’ optimism for lower prices. We are concerned that fertiliser rates, shifting growing patterns, energy costs are already starting to harden suppliers’ expectations. The forth coming El Nino which is forecast to be a super weather pattern can also only bring bad news, although we would expect the major influence to be on 2027 harvests. We shall see.

Lots of water under the bridge in April, but fundamentally the issues remain the same, with huge uncertainty for multiple reasons remaining in supply chains generally. The repercussions of the Iran conflict are yet to be felt but ripples spread everywhere. From vessel schedules, to energy costs, fertilizer prices, revised planting priorities driven by Governments to protect food security domestically. The prediction for increased costs of finance, inflation the list continues and very few items are beneficial to pricing or availability.

Attention has switched from the ever-changing tariff situation in the USA impacting global supply routes to the conflict in the Middle East. This has had an immediate impact on both transport and freight rates. The initial impact will be absorbed by ourselves for clients already contracted but going forward prices will reflect the higher charges. Of course supply chain disruption immediately occurs too. Ports in the region become congested as cargo bound for the Gulf is offloaded, or countries prioritise the arrival of oil and gas vessels to keep their economies going. Sailing times change and transshipment options further delaying cargo arrival occurs. Fundamentally supply chains get longer and more expensive.

The USA tariff issues continue to dominate the global news disrupting trade patterns, adding confusion and uncertainty to all players. Trying to establish a plan or pattern of supply is impossible. The impact reaches beyond the USA and dampens activity. The commencement of hostilities between USA and Iran is going to have major impacts should the conflict continue. Already we see shipping lines diverting away from Red Sea routes, oil prices increasing and the US Dollar strengthening from its weakening position last week. All is bad news for prices. We would expect vegetable oil prices to react and drag oilseeds with them.

Shifting trade patterns driven by uncertainty and new alliances being forged due to the breakdown of trusted supply routes are the principal focus. Combined with tighter and tighter regulations and new rules with the EU, the supply chain business becomes more and more complex. A mismatch between demand from different regions adds to the confusion and delivers uncertainty.

US dollar weakness sees export prices increase slightly from many regions which combined with a slow increase in freight adds some cost to supply chains, but not significant in general terms. Increased regulations and tightening of requirements also impacts supply and less and less exporters are wanting to entertain EU/UK/USA markets who have the highest requirements and the most price competition and who can blame them.