The International Grains Council (IGC) has cautioned that even if the Strait of Hormuz is reopened, a rapid return to normal shipping patterns is improbable, and carriers are expected to stay wary. According to the IGC, the strait\u2019s reopening will not instantly restore regular operations because minesweeping and clearing the accumulation of vessels that gathered in the Persian Gulf during the halt are necessary.<\/p>\n
Read also: US and Iran Announce Agreement to Reopen Strait of Hormuz<\/a><\/p>\n The United States and Iran are anticipated to formally sign a preliminary agreement on June 19, which would stop hostilities between the two nations and reopen the strait. Trade movement through the waterway has been interrupted for several months. Under normal conditions, the passage handles roughly one-fifth of global seaborne oil and LNG and one-third of its fertilizer, but current traffic stands at under 10% of its typical volume.<\/p>\n Alexander Karavaytsev, senior economist at the IGC, stated that a modest uptick in traffic should be anticipated within days of the opening, but the timeline for full normalization remains very uncertain and might not happen until shippers regain complete confidence. He pointed out that the disruptions in the Red Sea and Suez Canal demonstrate that shipping patterns can stay below historical averages for years.<\/p>\n Vessel owners will require confirmation that transit is not just feasible but also secure, Karavaytsev said. Some may hold off until the peace accord is implemented and the final agreement is reached before deploying ships. Elevated risk insurance premiums are also expected to continue, possibly postponing a complete recovery to pre-crisis cargo volumes.<\/p>\n After the strait reopens, energy shipments will probably receive precedence, followed by dry bulk and container trades, including grain and oilseed imports. The Gulf region entered the disruption with fairly ample grain and oilseed inventories due to robust import programs earlier in the year, Karavaytsev noted. Saudi Arabia and the United Arab Emirates have also effectively rerouted cargoes to alternative pathways after the disruption, especially Red Sea ports and Fujairah, lessening the urgency to return to Persian Gulf ports.<\/p>\n In late April, Saudi Arabia bought nearly 1 million tonnes of wheat for delivery to Red Sea ports from June through August. Furthermore, domestic wheat harvests in Iran and Iraq are expected to curb nearby wheat import needs. The primary effect of the strait restrictions was on input markets. Fertilizer costs rose, potentially prompting some farmers to lower application rates. Higher crude oil prices also drove up marine fuel expenses, freight rates, and agricultural operating costs, Karavaytsev said. The strait\u2019s reopening now will partly aid farmers with this year\u2019s harvest, he said.<\/p>\n Fertilizer supply chains will require time to recover, and delayed shipments still need to be transported and distributed. For much of the Northern Hemisphere, fertilizer applications for the 2026-27 crop have already been finished, and input costs are mostly fixed. Improved availability and lower prices would be more significant for Southern Hemisphere crops, including late top-dress applications for wheat and South American maize and soybean crops planted from September.<\/p>\n Source:<\/a> IndexBox Market Intelligence Platform\u00a0\u00a0<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"The International Grains Council (IGC) has cautioned that even if the Strait of Hormuz is reopened, a rapid…\n","protected":false},"author":2,"featured_media":165936,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[28],"tags":[11893,3459,102,150,2099,101,2139,11894],"class_list":["post-165966","post","type-post","status-publish","format-standard","has-post-thumbnail","category-strait-of-hormuz","tag-global-logistics","tag-global-trade","tag-hormuz","tag-shipping","tag-shipping-industry","tag-strait-of-hormuz","tag-supply-chain","tag-supply-chain-management"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/116770324156856522","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/165966","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=165966"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/165966\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/165936"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=165966"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=165966"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=165966"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}