The Dutch company Europe Retail Packing B.V., based in Poeldijk, says this week will be remembered across the industry. "Never have we experienced such intense uncertainty, supply disruptions, delays, and flight cancellations," said Omer Kamp.
In less than two weeks, the industry, and especially the herbs sector, has faced several disruptions that have altered trade conditions. The war involving Israel, the United States, and Iran has expanded into a wider regional conflict, persistent rains in parts of Africa have reduced yields and affected quality, and flight delays and cancellations have added further uncertainty to the market.
© Europe Retail Packing
"Many factors accumulated this week," said Raymond van der Burgh. He explains that as the conflict spread to other regions in the Middle East, flights from Kenya that normally connect via the Emirates, Dubai, or Saudi Arabia were cancelled. The bottleneck created by this reduced cargo capacity has cut capacity to Europe by nearly 50%. Supplies from Israel are even more constrained, with few flights taking off and cargo space at very low levels.
Max de Vetten adds that growing conditions in Kenya have also been affected. Nearly three weeks of constant rain have caused damage and led to disease in basil crops. "We estimate over 30% loss in basil supply," he said.
"In plain terms," Kamp concludes, "this week basil supply was well under half of normal volumes, and of the portion available, only half actually left Kenya or Israel and reached Europe." Consequently, basil availability in Europe this week was extremely limited, even compared with the 2011 Iceland volcanic eruption. At that time, there was at least some supply coming from Italy. This week, however, availability has been minimal.
There are indications that from mid next week the situation could improve in terms of quality and logistics. Kamp stresses this is a prediction based on current information and assumptions, while the geopolitical situation remains volatile and multiple outcomes remain possible.
Energy price volatility is another factor affecting the sector. "Petroleum prices are shifting on an hourly basis," van der Burgh said. The closure of the Strait of Hormuz could have consequences for transport costs. He noted crude oil has moved rapidly, for example, rising from US$80 to US$120 in less than a day before dropping again. These shifts make market reactions unpredictable. "Transporters, carriers, airlines, and warehousing facilities will have no choice but to raise prices," he added.
Gaby Poot of ERP noted that the domestic Dutch season is approaching. The white asparagus season has begun, and domestic greenhouse production will soon supply herbs and other produce such as aubergines, peppers, cucumbers, tomatoes, and more.
© Europe Retail PackingFor more information:
Omer Kamp
Europe Retail Packing
Tel: +31 (0)174 28 25 1
Email: [email protected]
www.europeretailpacking.nl
