- Статьи
- Economy
- Arrived: imported goods may rise in price by a third due to the conflict in the Middle East
Arrived: imported goods may rise in price by a third due to the conflict in the Middle East
Imported goods in Russia may rise in price by 15-30% in the next two months with a protracted crisis in the Middle East, experts interviewed by Izvestia estimated. This applies to Apple, Samsung, Sony equipment, auto parts for European and American brands, and industrial equipment. The reason is the collapse in the Strait of Hormuz. Now the vessels are being redirected through the ports of Oman. And if the situation worsens, the route may even go around Africa. These schemes have already been worked out in previous crises, but they increase the delivery time and cost of transportation. What to expect from customers and whether there may be a shortage of certain goods is in the Izvestia article.
What will happen to the prices of imported goods
Electronics and auto parts that are transported to Russia through parallel import channels may rise in price by 15-30% in the next two months, experts interviewed by Izvestia believe. At the same time, the main impact will be on Apple, Samsung, Sony equipment, components for European brands and industrial equipment.
The reason is the aggravation of the situation in the Strait of Hormuz, through which a fifth of the world's seaborne oil supplies and a significant volume of containerized cargo pass. Insurance premiums for ships in the conflict zone have already soared by 50%, and major operators have suspended transit, said Alexey Ivanov, owner of the Alliance Trucks dealership network.
Problems with shipping have directly affected the main transshipment point: it was through the UAE that the bulk of parallel imports went in recent years, the financial adviser and founder of Rodin confirmed.Capital Alexey Rodin.
—From 40 to 60% of everything that was transported to Russia through alternative channels after the imposition of sanctions passed through the UAE: Apple equipment, Samsung electronics, Sony, auto parts for European brands, industrial equipment, and some food," he said.
Traffic across the strait has already collapsed by 70%, added Mikhail Nikitin, Head of International Business and Finance Practice, partner at 5D Consulting.
Why insurance has become a major problem
Iran has effectively stopped the movement of ships through the Strait of Hormuz, Deputy Commander of the Naval Forces of the Islamic Revolutionary Guard Corps Mohammad Akbarzadeh said on March 4. After that, passage through the artery became impossible for all types of ships — oil tankers, commercial and fishing vessels. According to Akbarzade, more than ten tankers ignored the warnings and were attacked with various rocket projectiles.
Insurance premiums for ships have also skyrocketed due to military operations in the region, and some logistics operators are putting additional risks into their tariffs, said Olga Gogaladze, an expert on financial markets.
— In recent days, we have seen that offers for freight and insurance costs sometimes increase by two or even three times. This is a classic market reaction to military risks," said Anton Tsetsinovsky, Director for International Cooperation and Development at the Russian Export Center (REC).
At the same time, a military conflict is force majeure, which is considered an exception to any insurance coverage, the All—Russian Union of Insurers explained. That is, even those carriers that are willing to pay increased premiums may face insurers' refusal to cover risks in a war zone.
The Ministry of Economic Development told Izvestia that they are carefully analyzing the incoming information, including in terms of its impact on the global economy and trade.
How sea routes will change
The way out of this situation may be the redirection of cargo flows bypassing the risk zone. Oman, which remains one of the few countries in the region that remains calm and neutral, can play a key role here, said Mikhail Nikitin from 5D Consulting. This particular route should be considered as a strategic assembly point for the long-term development of alternative logistics, the expert believes.
Such a scheme has already been worked out in previous crises, the REC added. Against the background of earlier episodes of tension in the region, shipping companies redirected ships to bypass the risk zone through Oman with unloading at local ports or through the Cape of Good Hope, Anton Tsetsinovsky recalled. According to him, this practice will continue in the current situation.
However, lengthening routes automatically increases the delivery time and cost of transportation. Previously, cargo from the UAE went directly to Novorossiysk, bypassing the Strait of Hormuz, but now ships are forced either to unload at the ports of Oman with subsequent transshipment, or, if it is unsafe in the Red Sea (as was the case during previous crises with the Houthis), to bypass Africa. Any of these options adds 20-35% to the logistics cost, explained Alexey Ivanov from Alliance Trucks.
When can the goods on the shelves start to become more expensive?
Business has already begun to factor the increased costs into the final price, experts warn.
— The paradox of the situation is that even with a strong ruble, retail prices will rise. The currency may be cheap, but the process of delivering goods to Russia in this currency will rise in price by 20-30%. As a result, the support of the ruble will help balance the state budget, but inflationary pressures due to expensive logistics will hit customers' wallets," Olga Gogaladze warned.
At the same time, there is no need to fear a shortage of goods. According to Alexey Ivanov, stocks for various product groups will last for 4-8 weeks, which is exactly how long the current stocks of electronics and auto parts are designed for.
However, there is another factor that can work faster than a real logistical shock — the behavior of the sellers themselves, warned Mikhail Nikitin from 5D Consulting. Retailers have historically used any high—profile information occasion to preemptively raise prices - long before real costs rise. This factor is likely to be the main driver of price dynamics in March, the expert believes.
At the same time, Russia will not suffer the most from the Middle East crisis — the main risks fall on the largest importers of energy resources in Asia and Europe, experts interviewed by Izvestia explained.
The biggest blow could be inflicted on the economies of China and India, the main buyers of Russian oil, Olga Gogaladze warned. For example, Beijing also buys about 90% of Iran's raw material exports, including oil and condensate. Expensive energy resources will provoke a decline in their industrial production and accelerate global inflation, the expert believes.
In addition, the crisis will have serious consequences for Europe: between 20 and 30% of global exports of liquefied natural gas normally pass through the Strait of Hormuz, Oleg Shevtsov, Deputy General Director of Project No. 7 LLC, recalled.
In a global sense, the impact on the global economy will be tangible for everyone, but Russia is objectively benefiting from the reorientation of demand for its raw materials, Mikhail Nikitin noted. Both India and China will be more active in buying Russian oil in the face of disruptions in Middle Eastern supplies, so this is rather a plus for the balance of payments on the horizon, the expert explained.
What to expect in the coming months
The coming weeks will show how much the crisis will drag on. If the conflict can be resolved quickly, the price increase may turn out to be one—time and not exceed 5-10% - suppliers will simply include future risks in the cost, Alexey Rodin believes. If the situation drags on, a 15-30% price increase will become a reality.
Economist Olga Gogaladze shares similar estimates: according to her, with a prolonged crisis, import prices will inevitably rise by double digits. At the same time, even after the situation stabilizes, prices are unlikely to return to previous levels — logistical costs will not decrease, the expert noted.
The REC draws attention to the fact that the share of containerized cargo passing through the Strait of Hormuz is not so large on a global scale — less than 4% of the global container turnover. But for Russia, this route was critically important precisely as a parallel import channel.
Everything depends on the duration of the conflict, Alexey Ivanov summarized. The rapid end of the military operation will lead to a rapid drop in energy prices and the restoration of logistics chains. Downtime is unprofitable for anyone — everyone loses a lot of money on it.
Переведено сервисом «Яндекс Переводчик»
