Houthi rebel group to stop attacks on US/UK ships in Red Sea

The Red Sea crisis that has caused havoc for international trade and the shipping industry may be coming to an end.

The Red Sea crisis that has caused havoc for international trade and the shipping industry for the best part of 12 months may be coming to an end.

On Monday Yemen-based Humanitarian Operations Coordination Centre, which liaises between the Houthi rebel group and commercial shipping operators, said in an email the Houthi forces would cease attacks on most vessels in the Red Sea, except those owned by Israeli individuals or entities and/or sailing under the Israeli flag.

It comes following the announcement of a ceasefire agreement between Israel and Hamas, with sanctions to be stopped “upon the full implementation of all phases of the agreement”.

In the past 12 months, vessels carrying Australian grain and produce to Europe had been forced to re-route around the Cape of Good Hope and up the west coast of Africa, with at least 10 days being added to shipments.

“Freight rates moved quite a bit higher early last year, and since then they’ve come a little bit down but they’re still quite a bit elevated,” Raboresearch general manager Stefan Vogel said.

Mr Vogel said the higher freight rates would have likely contributed to inflation in Australia, but that the crisis would have also had benefits for Australian producers.

“(The crisis) helped us a bit more to protect our trades into the Asian and Middle Eastern market, compared to what was coming from Ukraine and Russia that would have to go through the Suez Canal,” he said.

VFF president Brett Hosking. Picture: Yuri Kouzmin

Victorian Farmers Federation president Brett Hosking said the last 12 months had certainly had an impact.

“Any disruption to global trade flows back through to the farmgate, and whatever extra risk or cost is involved in executing trade impacts what the farmer sees in their pocket,” he said.

“Potentially having that risk reduced, I guess it will take some time for trade to flow back through that area with confidence, will certainly mean dollars flow back to growers.”

With new US President Donald Trump being sworn in to office for the second time on Monday, Mr Vogel said it will be interesting to see how successful he is in making a difference in the region.

“He made a very strong statement in terms of the area of Israel, and clearly he’s also trying to make an impression in discussions with the Iranians … A lot of the support for those Houthi pirates is coming from Iran,” he said.