Introduction:The Houthi militants in Yemen have recently launched frequent attacks in the Red Sea and surrounding waters, with three ships targeted in a single day, shaking the global shipping industry. Among them, MSC has announced the suspension of services at the port of Djibouti, directly impacting Ethiopian coffee exports. This article delves into how the Red Sea situation is affecting the global coffee supply chain and provides practical references for traders facing soaring freight costs and unstable shipping schedules.

The Houthi militants in Yemen have recently carried out frequent military operations in the Red Sea and the Strait of Mandeb, attacking three international commercial vessels within a single day, further worsening the regional situation. These actions not only threaten maritime safety but also significantly impact international trade reliant on this route, especially Ethiopia's coffee exports.

According to the latest reports, on July 12, the Houthi militants claimed to have launched missile and drone attacks on the oil tanker "Butterfly"—a Libyan-flagged vessel—in the Red Sea and the Strait of Mandeb. On July 9, they also targeted multiple vessels, including the "Maersk Sentosa" and "Marthopolis" in the Arabian Sea, as well as the "MSC Patnaree" in the Gulf of Aden.

Among the attacked vessels, the "Maersk Sentosa" is owned by Maersk, the world’s largest container shipping company, while the "MSC Patnaree" is owned by the international shipping giant MSC. Maersk confirmed that its vessel encountered nearby explosions during its voyage, fortunately sustaining only minor damage and remaining operational. MSC stated that several of its ships were attacked by the Houthi militants, who considered them "Israeli-affiliated vessels," at the time when the ship was en route from Berbera Port in Somalia to Colombo Port in Sri Lanka.

As tensions in the Red Sea continue to escalate, international commercial vessels have already experienced at least 15 missile attacks by the Houthi militants, with many large ships suffering minor to moderate damage, as well as incidents involving crew injuries and the sinking of smaller vessels. Such threats pose significant challenges to the entire regional shipping industry.

Particularly noteworthy is that the port of Djibouti, as the sole gateway for Ethiopia’s import and export goods, is under unprecedented pressure. Currently, MSC controls about80%of its capacity, yet due to security concerns, MSC recently announced the complete suspension of services at the port of Djibouti. This move will deal a heavy blow to Ethiopia’s export trade, especially its crucial coffee export business.

An international coffee trader revealed that currently, many clients have reserved coffee shipments but cannot obtain definite departure dates. Even if they are willing to pay higher freight costs, the arrival times of the goods remain uncertain, throwing the entire supply chain into great instability.

Data shows that the Houthi militants in Yemen reached a peak in attacks on commercial vessels in the Red Sea and the Gulf of Aden in June 2024, and the new series of attacks in early July occurred outside their traditional threat zones, indicating an expansion of their operational range.

In fact, Ethiopian coffee exports have long been facing multiple challenges. Due to the Red Sea crisis forcing most shipping companies to reroute around the southern tip of Africa, shipping volumes at the port of Djibouti have plummeted, resulting in a large backlog of coffee cargo at the port. Now, with the Houthi militants further expanding their attack scope and threat level, there is potential not only for another surge in shipping costs but also for prolonged transportation times, which will in turn affect coffee trading prices in the international market.

For coffee importers and traders, apart from dealing with unstable shipping schedules, they must also cope with surging transportation costs and unpredictable supply conditions. It is recommended that businesses closely monitor developments in the Red Sea situation, evaluate the feasibility of alternative routes, and communicate with supply chain partners in advance to minimize potential operational risks.

The above content is compiled by CoffeeHunters, a coffee news website.