Panama Canal drought to delay grain ships

According to Reuters, bulk grain shippers hauling crops from the United States Gulf Coast export hub to Asia are sailing longer routes and paying higher freight costs to avoid vessel congestion and record-high transit fees in the drought-hit Panama Canal.

The shipping snarl through one of the world's main maritime trade routes comes at the peak season for US crop exports, and the higher costs are threatening to dent demand for US corn and soy suppliers that have already ceded market share to Brazil in recent years.

Ships moving crops have faced wait times of up to three weeks to pass through the canal as container vessels and others that sail on more regular schedules are scooping up the few transit slots available.

The restrictions could continue to impede grain shipments well into 2024 when the region's wet season may begin to recharge reservoirs and normalize shipping in April or May, analysts said.

"It's causing quite a disruption both in expense and delay," said Jay O'Neil, proprietor of HJ O'Neil Commodity Consulting, adding that the disruption is unlike any he's seen in his 50 years of monitoring global shipping.

The Panama Canal Authority restricted vessel transits this autumn as a severe drought limited supplies of water needed to operate its lock system. The Authority did not respond to request for comment on grain shipment delays.

Only 22 daily transits are currently allowed, down from around 35 in normal conditions. By February, transits will shrink further to 18 a day.

Grain ships are often at the back of the line as they usually seek transit slots only a few days before arriving, while others like cruise and container ships book months in advance.

The Authority also offers the rare available slots to its top customers first, none of which are bulk grain haulers, O'Neil said.

Any scheduled slots that come available are auctioned off, but demand is exceptionally high. Some slots have gone for US$ one million or more, untenable costs for the traditionally thin-margin grain trading business.

"The grain trades and the bulk carrier segment are going to be the last customers to go through the Panama Canal. I would not rely on the Panama Canal any time soon," said Mark Thompson, senior trader at Olam Agri.

Wait times for bulk grain vessels ballooned from around five to seven days in October to around 20 days by late November, O'Neil said, prompting more grain carriers to reroute.

Options include sailing south around South America or Africa, or transiting the Suez Canal. But those longer routes can add up to two weeks to shipping times, elevating costs for fuel, crews and freight leases.

While grain prices have fallen from 2020 peaks, higher freight costs will be passed on to grain and oilseed importers who buy for human food and livestock feed.

"Commercial companies have been finding ways to navigate around the problem. But undoubtedly it costs the end-user more money," said Dan Basse, president of Chicago-based consultancy AgResource Co.

In the second half of October, only five US Gulf grain vessels bound for East Asia transited the Panama Canal, while 33 sailed east to use the Suez Canal instead, according to a US Department of Agriculture (USDA) report. In the same period last year, 34 vessels used the Panama Canal while only seven used the Suez.

Some US exporters have also been rerouting crop shipments to Asia to load from Pacific Northwest ports instead. But that, too, comes at a higher cost as those facilities source grain mostly via rail as opposed to the cheaper barge-delivered loads supplying Gulf Coast exporters.

Only 56.8% of all US corn exports in October were shipped from Gulf Coast ports this year, down from 64.9% in October 2022 and 72.1% in October 2021, according to USDA weekly export inspections data.

 

 

 

Bangladesh starts using Chinese crude oil handling facility

Bangladesh has started using a large crude oil receiving and offloading facility built by China. This allows the south Asian oil importer to significantly reduce the cost of crude oil handling, reports Reuters.

The single-point mooring facility at Chattogram port recently offloaded 82,000 tons (about 600,000 barrels) crude oil from a 100,000-ton tanker, said an official with state-run Bangladesh Petroleum Corp (BPC).

The project is majority-funded by the Chinese government and build by a unit of Chinese state oil major CNPC.

Bangladesh, which imports most of its oil needs, does not have a deepwater port and has relied on small vessels to ship crude oil from large tankers parked outside ports.

That typically takes 11 days to offload a 100,000 ton oil cargo and the new facility cuts the offloading time to 48 hours, the official said.

An engineering unit of state major CNPC began in 2019 building the offloading facility financed by Export-Import Bank of China which offers preferential loans.

The new facility is expected to facilitate the planned expansion of Bangladesh's only refinery to 3 million tons per year (60,000 barrels per day) from 1.5 million tons per year currently.

 

 

 

Bangladesh: Opposition Fears Sanctions

Politicians, economists and analysts on Saturday said that the ruling Awami League (AL) will be responsible mainly if any Western sanctions or restrictions are imposed on Bangladesh as the government remains largely indifferent to their repeated calls for upholding democracy and human rights.

On Friday, making an oblique reference to the main opposition Bangladesh Nationalist Party (BNP), Prime Minister Sheikh Hasina said that the party is plotting to create a famine situation in February–March with the support of some foreign countries.

Earlier, in a recent statement AL General Secretary, Obaidul Qauder said that the BNP is relentlessly conspiring to have sanctions imposed against the people of the country with false and fabricated information.

Former President of Communist Party of Bangladesh Mujahiul Islam Selim told New Age that the AL government has no wish for holding inclusive and credible elections and it will be responsible if any sanctions are imposed for undermining the democratic electoral process and violating human rights as well.

The ruling AL and all other political parties and the people as well know that no free, fair and credible general elections can be held under a partisan government, said Selim.

Moreover, the AL also knows that they will invariably lose if a free, fair and credible general election is held, said the senior politician.

For this they became eager to hold a false and farcical general election, Selim added.

The government could still hold an inclusive general election by following the special constitutional clause and convening parliamentary sessions to pass the bill of caretaker government, he said.

Referring to the Prime Minister’s complaint that Bangladesh may face a famine after the general election, Selim said that such a comment can be a foreboding sign for the country and the wrong policies of the government would be responsible for that.

BNP standing committee member Abdul Moyeen Khan said, “If this were to be true that the BNP is responsible for the Western sanctions imposed on certain Bangladeshis who are undermining a free and fair election process then this would pre-suppose that BNP is running the decision making process of the Western Governments ! The absurdity of such Awami allegations is obvious to everyone and doesn’t deserve any consideration whatsoever.”

“The fact of the matter is, the forthcoming elections have already been rendered into a sham election by way of publicly horse trading the parliament seats not only between their partners but also with their domesticated opposition aspirants well before the actual election has even taken place. Such an election caricature cannot be acceptable to any democracy loving people whether inside or outside the country,” he observed.

Former cabinet secretary Ali Imam Majumder told New Age that if any sanctions are imposed on Bangladesh from the Western countries, alongside economic impact it would be shameful for the nation.

Former diplomat Humayun Kabir said that accusing the opposition for possible sanctions is nothing but a political rhetoric.

 The European Union and United States are major markets for Bangladesh’s garment sector. If any sanctions are to be imposed on this sector, it will be dangerous for Bangladesh.

Economists said that the country’s foreign exchange reserve and import payments would be badly affected, if any kinds of economic sanctions are imposed on the country in such a struggling economic situation.

Former World Bank Dhaka office chief economist Zahid Hussain said that any kinds of sanctions or trade penalties would create impact on the country as the economy has already been struggling due to shortage of dollars.

‘If any sanctions affect the country’s export-oriented industries, mainly the readymade garment industry, it would create an adverse impact on the country’s foreign exchange reserve and employment as well,’ he added.

Asked about the risk of famine by March 3 and whether the government has taken adequate measures to tackle such a crisis, he said that the government has to disseminate what kind of measures it has taken to overcome the situation.

Dhaka University economics professor MM Akash said that any kind of economic sanctions or penalties would create dollar shortages to lead to a crisis in the imported goods.

The chance of famine is little if the government takes adequate early measures as the country’s agricultural sector is quite strong. The poor people will not be affected much. But, the middle and higher income groups will suffer the brunt of crisis as they would not be able to use imported goods due to dollar shortages.

On September 22, the US Department of State said that they had started imposing visa restrictions on individuals involved in undermining the democratic election process in Bangladesh.

Under this policy, the US said that it would be able to restrict the issuance of visas for any Bangladeshi individuals believed to be responsible for, or complicit in, undermining the democratic election process in Bangladesh.

 

Dismay over US veto on Gaza ceasefire

Arab and Muslim ministers, led by Saudi Foreign Minister Prince Faisal Bin Farhan, expressed their resentment over the United States' use of the veto, preventing a UNSC resolution for an immediate ceasefire in Gaza during an official meeting with US Secretary of State Antony Blinken.

The ministerial committee, assigned by the Joint Arab-Islamic Extraordinary Summit, emphasized their demand for the United States to take responsibility and necessary actions to compel the Israel to immediate cease fire.

They reiterated their united stance against the continued Israeli aggression on the Palestinian people in Gaza, renewing the call for an immediate and comprehensive cessation of hostilities, ensuring the protection of civilians in accordance with international humanitarian law.

The committee members expressed their rejection of any forced displacement operations carried out by the occupation. They underlined the importance of adherence to international law and humanitarian law, committing to confronting such actions on all levels.

Renewing their commitment to a genuine political climate leading to a two-state solution, the committee members emphasized the establishment of a Palestinian State along the June 4, 1967 borders in line with relevant international resolutions.

They rejected any attempts to fragment the Palestinian cause and discussed the future of Gaza separately from the broader Palestinian issue.

Yemeni Resistance declares war against Israel

Few days after the outset of Israel’s savage invasion of Gaza, Yemeni Resistance declared war against Israel after the ultimatum it had set for cessation of aggression expired and Israel Occupation Forces kept intensifying the bombardment, claiming lives of thousands of Palestinian children and women.

The Yemeni Resistance’s war declaration was initially interpreted as its intention to target Israeli facilities within the range of its known conventional mid-range armaments in south of Occupied Palestine.

Speculation to a large extent, were focused on the ability of Israel’s AD systems and those of its allies in war against Gaza, especially US, but few were ready for what Yemeni Resistance had in sleeves.

After openly announcing that Israeli military and cargo ships are now the legitimate military targets, the Resistance in Yemen started sending warning signs to the Israeli ships which soon turned into a full-scale economic war against the Regime’s previously considered safe corridors.

Amid the conflict, the Yemeni Resistance combatants successfully boarded a cargo ship belonging to one of the most renowned Israeli merchants, directing it to a port in Yemen.

This persuaded nearly all Israeli shipping companies and those associated with them to change the shipping direction and avoid passage through the Red Sea which economically serves as the most convenient maritime transportation route for the Zionist Regime; an interim remedy which has increased the shipping costs drastically.

Since then, many have articulated their contemplations about the possible future of maritime transportation for Israel, as Yemeni Resistance does not seem keen towards the idea of letting Israel’s criminal aggressions go unpunished.

For instance, an Israeli media published a report describing the soaring costs of maintaining security for Israeli shipping companies and the scenarios before them in case the Resistance in Yemen would not accept loosening the rope just for a little.

In an article titled “The Israeli shipping companies are requesting expanded military protection within the Middle East [West Asia] routes”, the outlet discloses that although attacks against Israeli cargo ships are not new, but the scale and intensity is.

Recent attacks increases the fear over the threat Iran inflicts on the Straight of Hormoz; a narrow passage which separates Iran from the Persian Gulf countries and serves as a major bottleneck for export of gas and oil in the global scale.

Although the article has undertaken the same shabby strategy all Israeli media and officials resort to whenever they see the chance (that Israel’s problem is West’s problem, and Iran is the most important problem of Israel), but there are some interesting talking points in between the lines of the piece which can be considered indicators of a mentality trending among Israeli/ US decision makers.

The article quotes McNally, a former adviser to the President of the US, saying “There is a %30 chance of substantial perturbation of energy supplies in the region”, which is not neglect able.

Although Iran and the US are not interested in a direct confrontation, McNally believes, but the two sides might find engaging in unintended conflicts inevitable, which means widespread disruption in %40 of global oil trade just in regards with what might happen in the Straight of Hormoz. To emphasize the intensity of the situation, McNally also mentions this is besides the fact that one tenth of the maritime oil trade is done through the red sea.

To make sure that all westerners are on board, even those who are not clever enough, the article makes is explicitly clear that this is not just Israel’s problem, but all Europe’s problem.

The writer quotes the CEO of an advising company in field of maritime transportation, saying “The Red Sea routes are important, especially for the Europeans as they receive all of the oil and LNG they’ve purchased from the Middle East [West Asia] through the Red Sea”.

The Yemeni Resistance has time and again insisted that its targets are the Zionist Regime’s assets, not those of any country, and has proven this point in practice as well.

Nevertheless, it’s unlikely to see the westerners, especially Europeans, realizing that only the Israeli assets are at stake here. It is only a matter of time before we see the European politicians chewing rhetoric about how the Yemeni Resistance should be confronted; which doesn’t matter anyway.  
 

 

Exercise of veto leaves the US diplomatically isolated

The exercise of veto by the United States has left Washington diplomatically isolated on the 15-member council. Thirteen members voted in favor of the draft resolution put forward by the United Arab Emirates, while Britain abstained.

Deputy US Ambassador to the UN Robert Wood said, "We do not support this resolution's call for an unsustainable ceasefire that will only plant the seeds for the next war."

The United States and Israel oppose a ceasefire, saying it would only benefit Hamas, which Israel has vowed to annihilate.

Palestinian UN envoy Riyad Mansour told the council the vote means that millions of Palestinian lives hang in the balance.

Ezzat El-Reshiq, a member of Hamas' political bureau, condemned the US veto as inhumane.

Israel's UN Ambassador Gilad Erdan said in a statement, "A ceasefire will be possible only with the return of all the hostages and the destruction of Hamas."

Has Hamas committed horrendous mistake?

Countries of all stripes – whether developed or underdeveloped, democratic or authoritarian – have been known to commit strategic military miscalculations. The United States, for example, won decisive wars against developed countries such as Germany and Japan, but blundered in wars against much lesser powers like Vietnam in the 1970s and Iraq and Afghanistan after the 9/11 attacks.

Strategic military miscalculation usually results in the collapse of authoritarian regimes. The decision of Argentina’s military junta to invade the Falkland Islands in 1982 led to its defeat in the war against Britain and the fall of General Leopoldo Galtieri’s regime.

Iraq’s invasion of Kuwait in 1990 led to a military disaster for the Iraqi army following Operation Desert Storm, paving the way for the 2003 US invasion of the country and the fall of Saddam Hussein’s regime.

Successful countries eventually accept the need to revamp their political systems, initiate democratic reforms and champion world peace.

It took Germany, whose army fought exceptionally well operationally and tactically, two world wars to metamorphose.

It took Japan’s disastrous defeat precipitated by the Pearl Harbor attack to convince Tokyo to change. Under the US direction, the two countries transformed into full-fledged democracies.

Since the turn of the 20th century, political leaders, heads of state and political movements in the Arab world have also shown a propensity for massive miscalculation.

Hamas October 07 attack is a prime example, but it was precipitated by several other cases that have shaped the region since World War I.

Hamas’ rationale for last month’s attack stemmed from its conviction that Israel, with United States backing and Arab acquiescence, intended to eliminate any possibility of Palestinian statehood.

By taking Israeli hostages, it also intended to secure the release of thousands of Palestinian prisoners being held in Israeli jails, knowing that Israel has in the past been willing to conduct prisoner swaps.

In 2011, Israel released more than 1,000 Palestinian prisoners to secure the release of Gilad Shalit, an Israeli soldier detained by Hamas for more than five years.

 However, Hamas failed to consider the likelihood that Israel’s war Cabinet would launch an unprecedented air and ground campaign following its attack, the scale of which recalled the genocidal horrors ingrained in Israel’s collective consciousness.

Hamas expected Israel to plead for negotiations to secure the freedom of some 240 Israeli captives. Images from Gaza on October 07 showed Hamas guerrillas ecstatic about the possibility of a massive prisoner swap. But Israel instead unleashed a withering military campaign.

Moreover, Hamas did not inform Iran and its regional allies in advance about its plans. It assumed Hezbollah would join the fighting from southern Lebanon and that Iraqi militias in Syria would engage Israel from the Golan Heights.

Hezbollah’s unenthusiastic involvement in the war has cost it far more casualties than Israel and did not relieve even the slightest pressure on embattled Hamas.

Hamas was left stunned by its allies’ tepid response; having previously believed its attack would transform the Middle East and pave the path toward establishing a Palestinian state.

An extraordinary summit of Arab and Islamic countries held last month in Saudi Arabia resulted only in generic statements of support for the Palestinians and demands for the immediate cessation of hostilities.

Hamas counted on the outbreak of a third intifada, but Israel’s preemptive raids against West Bank activists ruled out this possibility as well.

Arab leaders, engrossed in a distorted worldview, tend to see the world through the prism of their domestic politics, often failing to comprehend the complexity of international relations.

Arabs in high office are autocrats who do not answer to anybody else, driving them to make fateful decisions.

Many Arab leaders live in echo chambers, making decisions premised on faulty assumptions, inattentive to how their antagonists might respond. The consequences have played out time and again, including today in Gaza.