Locals who came to the Tirur market on Wednesday were in for a surprise. Export quality bananas, cucumbers, pumpkins, tubers and one-kg ginger packets were sold from trucks parked by the wayside at throwaway prices. When consumers bargained, prices dropped even further.  

This distress selling of top quality farm products was one of the ways in which the stress of the Middle East crisis played out in Kerala.

After Iran began retaliatory strikes against US bases in Gulf Cooperation Council (GCC) countries, major shipping companies operating to and from these countries have temporarily ceased operations, and transit points like airports, ports and logistical hubs have also shut down.  

Doomsday messages
Exporters in Kerala are now inundated with messages of precautionary shutdowns by major shipping companies. 

"Due to the escalating security situation and the closure of the Strait of Hormuz, RCL HQ has decided to immediately suspend all fresh bookings to/from the Gulf and Red Sea region until further notice," RCL HQ, a Thai-based Container Shipping Lines company, told Kerala exporters on March 2.

Other major shipping companies like Ocean Network Express (ONE) and MSC Mediterranean Shipping Company followed suit, sending mails declaring suspension of operations. Cargo movements to countries like the UAE, Saudi Arabia, Qatar, Oman, Kuwait, Iraq, Jordan and Egypt have stopped.

"All feeder lines have suspended operations from Kochi seaport. Already, we have received trade advisories from logistics companies like RCL, ONE, Unifeeder, Evergreen and DP World," said Munshid Ali, the secretary of Kerala Exporters Forum (KEF) and the owner of Ceekay Global Trading. External trade in Kerala is mainly through Cochin Port.

As it stands, cargo containers stuffed (shipping jargon for the process by which goods are arranged in a shipping container) to be despatched from Cochin Port are turned back instead of being directed to the container freight station where containers are weighed and readied to be shipped or de-stuffed. 

"Leading authorities of major logistics companies like Kerala State Industrial Enterprises and GDK (Gateway Distriparks Kerala) that operate the container freight stations have told us to stop exports for the time being," Ali said.

Airports have also been shut, and it seems for an uncertain period. On Wednesday (March 4), Qatar Airways announced that its flight operations would "remain temporarily suspended due to the closure of Qatari airspace". 

War clearance sale
Highly perishable items like lady's finger or bitter gourd or curry leaves are transported by flight. But other perishables whose freshness refrigeration can preserve like bananas, banana leaves, tapioca and pineapples are shipped to the Gulf in in reefer containers (specialised containers with refrigeration).

The tragedy of the war-induced halt of cargo transit operations is the accumulation of farm and dairy products with a 'blink and it rots' shelf life in airports and ports. "Once your product is off-loaded (taken out of export containers), we are done for. Our products lose its premium. We have to sell it at the price the consumer demands," said Abdurahiman of Marvel Exports.   

Such an inglorious fate is especially true of highly perishable goods that came to the Karipur and Kochi airports to be exported but were not. "These items have to be quickly sold locally or else it will be a complete wash out for the exporters and the farmers from whom they have sourced these products," said Habib Rahman of NAQD EXIM Consulting.

It was this desperation that was reflected in the 'clearance sale' of export quality farm products at the Tirur Market on Wednesday.

Fate of departed ships
Exporters whose consignments had left Kerala just before the war are equally troubled.

"A container ship named Zhong Gu Tai Yuan with a capacity of 5000 TEUs and with over 100 refeer (refrigerated) containers left the Kochi Port on March. We are not aware of its status. Since the Port of Jebel Ali has been closed, this ship could return without unloading its contents," the KEF secretary Ali said. 

There are also containers that have already reached ports like Jebel Ali but, with the war in progress, are held up in the ports. "Even with refrigeration, products like bananas will remain intact only for 10-15 days. Then, you cannot even do distress selling," Rahman of NAQD EXIM said.

Onion trick
But there could be lucky ones among those who have managed to get their goods across.

"There are those who export using commission agents," said Rahman. "This agent can hold back a scarce product with a longer shelf life and then release it into the market only when the price sets new highs. The exporter only has to give a commission of 5 per cent to the agent and pocket the rest," Rahman said. 

An onion exporter from Kerala is said to have recently made a killing this way.

Danger lurking in Red Sea
Gulf countries are the major importers of fruits and vegetables from Kerala. But other major items of export from Kerala like marine products, coffee, tea, cardamom, and cashew are bought mainly by the USA, China, the European Union, Japan and Vietnam.

But even exporters to unaffected regions find themselves in troubled waters. "The impact of the war on exports is too early to say," said Dr K N Raghavan, the chairman of Marine Products Export Development Authority (MPEDA). Yet, he has a serious concern. 

The war has now forced ships carrying goods to the US and Europe to a take a longer circuitous route. "The Houthis (the Yemenese militia) are a temperamental lot and they are active in the Red Sea. So ships have to take an alternative route even if it will cause huge delays," Raghavan said. 

The usual, most efficient shipping route is from the India Ocean through the Bab el-Mandeb Strait to the Red Sea and from there, through the Suez Canal, to the Mediterranean Sea and Europe. Now, fearing the Houthis, ships are forced to go around the Cape of Good Hope in South Africa, extending the journey by 12-13 days. 

What longer distances will do to freight rates, increased risk of shipping will do to insurance costs. Exporters are already staring at their shrinking bottom lines.