The Salt Manufacturers Association of Pakistan (SMAP) has issued an urgent appeal to the government, expressing the critical state of the country’s salt export industry. The industry, a vital economic contributor, faces a looming collapse due to escalating freight costs and disruptions in the Red Sea. Acting Chairman Qasim Yaqoob Paracha emphasized the unprecedented crisis faced by salt exporters, calling for an immediate and comprehensive government response to address the multifaceted challenges.
Paracha underscored the role of the state-owned Pakistan National Shipping Corporation (PNSC) as a crucial player in the crisis. He urged the corporation to enhance its capacity by adding more ships to its fleet and temporarily operate in the Red Sea route. This strategic move, according to Paracha, would not only benefit salt exporters but also assist various Pakistani exporters facing similar challenges. The ongoing conflict in Yemen has disrupted the security and traffic of the Red Sea, forcing shipping companies to reroute vessels and causing a surge in freight costs.
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Meanwhile, global trade and industry are grappling with a new challenge, as the Red Sea, a pivotal route for cargo movement between Asia and Europe, becomes increasingly unsafe due to attacks by Yemeni rebels on shipping vessels. The attacks have led some shippers to divert their vessels to longer and more expensive routes, impacting consumers worldwide who rely on imported and exported goods. The former chairman of the Pakistan Ship Agents Association, Mohammad Rajpar, highlighted the surge in freight charges, with some major shipping lines imposing a $1,500 surcharge, resulting in an almost 100% increase in freight rates.
Concerns Rise Over Extended Delays and Higher Costs
Businessmen have expressed concerns that ocean freight could rise to $5,000 per container if commercial ships opt for the alternative route via the southern tip of Africa, bypassing the Suez Canal. This would lead to extended arrival times of up to 20 days and increased fuel costs. The Suez Canal, a vital waterway connecting the Mediterranean Sea and the Red Sea, shortens the distance between Asia and Europe by thousands of kilometers. However, in times of crisis, some shipping lines prefer the longer route via Cape Town to avoid the risk of attacks.
In the face of these challenges, SMAP’s plea concluded with a call for swift government action, recognizing the broader impact on livelihoods, the economy, and Pakistan’s resilience. Paracha urged the Federal Minister for Maritime Affairs, the Ministry of Commerce, and other relevant authorities to understand the gravity of the situation and act promptly. The future of the salt export industry hangs in the balance, and decisive action is imperative for its survival.