About 7 million metric tons per month of grain cargoes usually transit the Suez Canal into the Red, but that has dropped significantly as Iran-backed Houthi militants have continued attacks on shipping despite U.S.-led air strikes on Houthi positions in Yemen.

“We calculate that another 12 vessels were diverted away from the Red Sea this week, carrying a total of about 700,000 metric tons of grain,” said Ishan Bhanu, lead agricultural commodities analyst at data provider and analyst Kpler.

“A total of about 4.5 to 4.6 million tons of grains cargo has avoided the Red Sea since December. We also saw more wheat being shipped from France and the Black Sea to Asia diverting away from the Red Sea.”

Many bulk carriers are still transporting grain through the region, however.

“A lot of vessels originating in the Black Sea are still taking the Red Sea route,” Bhanu said. “Diversion is more expensive for these vessels compared with those sailing from Europe or the United States.”

Commodity traders said it has become more difficult but not impossible to book ships for Red Sea sailings.

“It is hard but you can still find ships,” said one European grain trader involved in booking vessels for cereal exports to Asia. “Freight costs have risen and not all want to sail through the Red Sea even with a premium, but some will.”

One German shipping analyst said that some ship owners already operating in war-torn Ukraine are more willing to take the risk of traversing the Red Sea.

“Some vessels carrying Ukrainian grain exports to Asia are still transiting the Red Sea,” the analyst said. “These owners were already willing to accept the high risk to their ships and crews by loading in Ukraine.”

–Reporting for Reuters by Michael Hogan.

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“If you don’t think the economy is going to be in a substantial slowdown or recession, the prices are undervalued. If you do think we are going into a global slowdown, the prices have probably more room to fall,” Flynn explained.

“I lean more towards the fact that the market is overdone. We’re going to bottom out shortly,” he added, noting that he expects world supplies to tighten in 2024.

Until then, Flynn said the oil market was suffering from “high anxiety” due to the amount of volatility. One case in point was Saudi Arabia cutting its price for oil on Jan. 8, which saw values for Brent and West Texas Intermediate crude oils get hit hard.

In the same breath, he pointed to the risk to supplies that’s added some cost to oil. Namely the attacks on commercial shipping in the Red Sea being carried out by Iran-supported Houthi rebels in Yemen.

“But the reality is we haven’t seen any major oil disruptions. We haven’t lost too many barrels of oil because of this. Admittedly, [shipments] have been delayed around the Red Sea has added to the cost.

Flynn said there were widespread expectations the price of oil would have jumped with the start of the Gaza war and fears the conflict would spread throughout the Middle East. But such has not occurred so far.

He also pointed to the annual “rebalancing of the commodity index funds” with Bloomberg commodity index and the S&P Goldman Sachs index.

“When they rebalanced those indexes, they had to sell some oil. That put further downward pressure on prices,” Flynn said.

He said the hedge funds built a near-record short position in crude oil, which weighed on values.

“They’re betting on a recession. They keep selling in every rally in oil. They are doom and gloom, and they keep pushing the market lower,” Flynn commented.

“On the flip side of that, if they’re wrong, you can see a major reversal in price,” he added, noting colder temperatures will push up the demand for diesel and natural gas.

— Glen Hallick reports for MarketsFarm from Winnipeg. 

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“This is a devastating situation for millions of civilians impacted by the conflict on both sides, and we are deeply aware of the escalating humanitarian need in Gaza,” said Foodgrains Bank executive director Andy Harrington in an Oct. 23 news release.

Over 6,000 men, women and children in Israel and Gaza have died in two weeks of conflict, the Foodgrains Bank said. More than 1.4 million people have been displaced.

As a member of the Humanitarian Coalition, the Foodgrains Bank is working with partner organizations and local groups to bring humanitarian assistance to the area.

“As a humanitarian organization with members and partners working in some of the most challenging regions of the world, we believe all people have a right to receive life-saving assistance, and ongoing access to basic necessities including food, water, medical care and shelter,” Harrington said. ”

“These necessities are quickly running out in Gaza, and an urgent humanitarian response is desperately needed.”

One of the greatest challenges groups face is the issue of access, said Stefan Epp-Koop, the Canadian Foodgrains Bank’s senior humanitarian manager.

“At this stage, there is almost no access into Gaza for humanitarian organizations to provide aid, or for local partners in Gaza to access desperately needed supplies. The provision of humanitarian assistance is also tremendously challenging given the risks involved amid the current conflict,” he said.

On Oct. 21 a convoy of trucks carrying humanitarian aid crossed into southern Gaza for the first time since Israel began the siege.

Twenty flatbed trucks, flying white flags and honking their horns, exited the Rafah crossing after checks and headed into Gaza’s southern area which includes the major towns of Rafah and Khan Younis where hundreds of thousands of people made homeless by Israel’s unrelenting air war are sheltering. 

Israel’s “total siege” of Gaza, launched after the Oct. 7 cross-border attack on southern Israel by militants of the Islamist movement Hamas, has left the enclave’s 2.3 million people running out of food, water, medicines and fuel. 

Palestinian officials were disappointed that fuel supplies were not included in the consignment of food, water and medical supplies and added that the aid was only 3% of what used to get into Gaza before the crisis. 

“Excluding the fuel from the humanitarian aid means the lives of patients and injured will remain at risk. Gaza hospitals are running out of the basic requirements to pursue medical interventions,” the Gaza health ministry said. 

The United Nations said the convoy included life-saving supplies would be received and distributed by the Palestinian Red Crescent, with the consent of Hamas, which rules Gaza. 

By Oct. 23, aid and security sources reported that two more convoys had arrived via the Rafah crossing from Egypt.

–with files from Reuters.

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