Filenews 11 January 2024 - by Evagora Prokopiou
A resurgence of high prices in Cyprus will be brought about by the severe disruption caused by Houthi rebels to global maritime trade from the end of January. And it is unknown how long the new wave of price increases will last.
According to an assessment made to Phileleftheros by the general secretary of the Pancyprian Retail Trade Association (PASYLE), Marios Antoniou, data and messages from major retail suppliers suggest that a new round of price increases will affect shops, supermarkets and consumers towards the end of January.
In the same direction are the estimates of the General Secretary of the CCCI, Marios Tsiakkis, and the General Manager of OEB, Michalis Antoniou, who also place the product prices within the next 30 days.
The resurgence of inflation is this time directly linked to attacks carried out by the Houthis on merchant ships in the Red Sea, forcing the largest shipping companies to send their ships through Africa to the Mediterranean and Europe, with significantly increased freight costs as more time at sea and more fuel and other expenses are required.
In articles other than foodstuffs
What Mr. Antoniou of PASYLE emphasizes through "F" is that the price increases of products will mostly concern clothing, footwear, cars, electrical and electronic devices, components, some raw materials, etc. and not so much food and other basic necessities. He pointed out that the situation in the retail sector normalized just a few weeks ago due to the turbulence brought about by the coronavirus pandemic and the war in Ukraine in the supply chain and pricing.
Marios Tsiakkis, for his part, noted that the extra nautical miles that merchant ships are obliged to make add significant time and cost to each trip, which in turn has already increased freight rates for the use of ships and the cost of containers for traders, significantly affecting the available capacity.
With several container shipping companies continuing to avoid the Red Sea, freight rates on Asia-Europe routes have skyrocketed by more than 100% compared to the period before this crisis, with the increase for traders in Cyprus approaching 180%, the CCCI Secretary General told us. In addition, Mr. Tsiakkis noted that, possibly, another factor that will push up the prices of many products is the unloading of products in ports in Italy and Greece, before they are reloaded on ships to reach Cyprus, something with which Mr. Antoniou of OEB agrees.
The general manager of OEB, Michalis Antoniou, told "F" that the effects of the increase in container transport costs and the increase in cargo prices will bring turbulence to domestic retail trade, with significant price increases, with the problem, as he said, being complex and complex. He pointed out that the solution to this equation is difficult, with many variables.
The need for loans
Tsiakkis added that another important factor that may indirectly contribute to an increase in prices is the delay in receiving goods, which may force importers to place larger orders. These extra costs for larger orders will have to be covered by taking out loans, he explained, so repaying those loans, in conditions of high interest rates, may in turn affect the selling price of the products.
