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Shipping costs soar as Ukraine war hits maritime trade: UNCTAD

The war in Ukraine is one of the major issues affecting international maritime transport, compounding other challenges such as the Covid-19 pandemic and port congestion, and contributing hugely to higher shipping costs, says a report by the United Nations Conference on Trade and Development (UNCTAD).

For instance, the Russian Federation and Ukraine are prominent players in agrifood markets, including animal feed.

 Together, they account for 53 percent of the global trade in sunflower oil and seeds, and 27 percent in wheat.
In all, 36 countries import over 50 percent of their wheat from the Russian Federation and Ukraine alone, the report, titled ‘Maritime Trade Disrupted — The War in Ukraine and Effects on Maritime Trade Logistics’, says.

Gokaran Singh Pawar, General Manager-Sales of edible oil company Sunpure, says prices of edible oil shot up in the past few months due to multiple global factors, including the ongoing Ukraine war, resulting in supply chain disruption.

 The prominent trade route along the Black Sea is yet to be operational again. The prices increased by 50 percent barely a few days after the war broke out, he said.

Not just oil, but other products have been impacted too, says the UNCTAD report.

 Ukraine exported around 50 million tonnes of grain in 2021.
Before the war, estimates projected growth of 3 percent in global sea exports of grain, but this is set to shrink by 3.8 percent by end-2022.

Global shipments of fertiliser and its inputs such as potash are projected to drop by 7 percent in 2022.

Reduced grain exports from Ukraine are partly offset by increased shipments from other suppliers.
 For example, Brazil is expected to increase its wheat and coarse grain exports by an impressive 37 percent in 2022.
Together, Great Britain, Northern Ireland and the EU are set to expand their exports by 8 percent during the year.
Soyabean exports are expected to increase from Argentina, Brazil and the US.

Grain prices and shipping costs have risen since 2020, but the war has exacerbated this trend and reversed a temporary decline.

 Between February and May 2022, the transport cost for dry bulk goods like grains increased by nearly 60 percent.
The resulting increase in grain prices and freight rates would lead to a nearly 4 percent increase in consumer food prices globally.
 Almost half of this impact is due to higher shipping costs.

The Russian Federation is also a leading oil and gas exporter. In the face of trade restrictions and logistical challenges, the cost of oil and gas has increased as they have to be sourced from other places that are far away.

Higher energy costs have led to higher marine bunker prices, thereby increasing the shipping costs for all sectors.

By the end of May 2022, the global average price of very-low-sulfur fuel oil had increased by 64 percent, as against the start of the year.
These increased costs imply higher prices for consumers and threaten to widen the poverty gap, the report said.

If global trade is to flow more smoothly, Ukrainian ports should be opened up to international shipping.

Alternative transport routes must also be pursued. And investment in transport and trade facilitation should be fostered, including support for the most vulnerable economies, the report said.

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Customs

Tin Can Customs nets N574.3 billion in 2022 —–records N242.365 billion in exports

The Eyewitness reporter
The  Tin Can Command of the Nigeria Customs Service has realized a sum of N574.3 billion in 2022.
The Customs Area Controller (CAC), Tin Can Island Port Command, Comptroller Olakunle Oloyede, disclosed this at a news conference at weekend.

Oloyede said the figure represented an increase of N80.90 billion or 16.39 percent when compared with N493.4 billion recorded in 2021.

“This feat can be attributed to the constant rejigging of the existing measures geared toward sustaining the command’s revenue profile.

“It is as well as utilisation of some disruptive strategic measures such as: periodic capacity building, reshuffling and redeployment of officers using the Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis and implementation of the Vehicle Identification Number (VIN) valuation,” he said.

He noted that the command also ensured robust and continuous stakeholder engagements and collaborations with all sister government agencies and maritime associations.

“These led to timely intelligence sharing, utilisation and voluntary compliance to government’s extant laws by the trading public,” Oloyede said.

He added that the command increased surveillance on declarations made in order to sniff out improper declarations as well as offending items.

He pointed out that the system paid off with the command recording a total of 38 seizures with a Duty Paid Value (DPV) of N1.85 billion.

“These seizures comprise 763kgs of Colorado (Cannabis Sativa) weighing 345.1kg with a street market value of N714.6 million only as given by the National Drug Law Enforcement Agency (NDLEA), 5 x 40 containers of used motor tyre (5,060 pieces).

“Also among seized items are 1,150 bales of second-hand clothing, 1,190 cartons of 20 per carton of potassium bromate and baking powder, 11,392 cartons of 1,200 per carton Pharmacol injection chloroquine phosphate 322.5mg.5ml (IV and IM), 206,000 pieces of finished machetes.

“Also, 1,383 cartons of 50 rolls per carton of cigarettes, 650 cartons of 50 pieces per carton of new ladies shoes, 2,666 pieces in 36 pallets of new starter Ex-Premium Inverter Battery, 1,980 cartons of assorted non-alcoholic beverages and 1,048 cartons of Tilda basmati rice,” he said.

Oloyede listed others as 2,594 pieces of ammunition and 20 pieces of arms comprising of one pistol with 611090 (S/W) model JCP 40mm, one used Co2 air pistol with accessories cal 117(4.5m)BM, one marksman repeater pistol, six Mace pepper gun and 10 suspected arms of various types.

He said that the seizures when compared with the 2021 record of 27 seizures with a Debit Note of N607.27 only, show an increase of 11 seizures and N1.24 billion.

He said that the increase in the DPV rate could be associated with increased surveillance and intensified anti-smuggling drive, the high value of seized items and Naira depreciation that led to higher exchange rates on imported items.

“These prohibited items were seized and forfeited to the Federal Government in line with the provision of Sections 46 and 161 of the Customs & Excise Management Act (CEMA) Cap 45 LFN 2004 and Absolute Prohibition List of CET 2022- 2026.

“The command pertinently acknowledges the prominent roles played by the Customs Intelligence Unit, Valuation Unit, Federal Operations Unit, CGC Strike Force as well as interventions of Sister Regulatory Agencies like the NDLEA, Standards Organisation of Nigeria SON, the Nigeria Police and others in ensuring these seizures and detentions were made.

“A total of 60 suspects were detained in 2022 and were granted administrative bail while the command has 8 cases pending in court,” he said.

Oloyede said the command recorded a significant increase in the Free On Board (FOB) of exports in the period under review to the tune of $589,696,648 (N242,365,322,333.00) as against the $496,075,796 (N141,985,109,159.00) recorded in 2021.

He attributed the increase of 34.4 percent in the FOB to the high quality and value of exported commodities.

“However, the export report shows a decrease in tonnage of export from 1,723,986.8 in 2021 to 336,179.5 in 2022.

“The decrease in tonnage could be connected to current government fiscal policy which prohibited the export of wood and wood products as well as the global unrest with its concomitant economic challenges,” he said

He listed the commodities exported through the command to include: cocoa beans, insecticides, dried ginger, empty bottles, soya beans, cashew nuts, cigarettes, rubbers, cocoa butter, frozen shrimps, copper ingots, aluminum ingots, sesame seeds and other manufactured items.

“Cocoa beans were the highest exported commodity while the legend stout was the least exported commodity.

“The future of export in the command looks brighter as the command in line with the headquarter circular on Export Standard Operating Procedure (SOP) released a Port Order on the Command’s harmonised SOP for the seamless facilitation of Export Trade in strict compliance with Extant Laws and guidelines on Export,” he said.

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Economy

CBN succumbs  to pressure, extends use of old naira notes to February 10

The Eyewitness reporter
The Central Bank of Nigeria (CBN) has finally caved in to Public outcry over the February 1st deadline for the use of old naira notes when on Sunday, the apex bank announced February 10 as the new date.
Announcing the new deadline in a statement, Governor Central Bank Of Nigeria(CBN), Godwin Emefiele, said the decision to add extra 10 days was “to allow for the collection of more old notes”

Up till Saturday, CBN had insisted on the 31st January deadline for the validity of the old N200, N500 and N1,000 despite overwhelming complaints that the notes are either not available or in short supply in the banks or their Automated Teller Machines.

Last October, Emefiele announced the Naira redesign policy which entails the issuance of new notes to replace the existing N200, N500 and N1,000 series.

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Customs

”No container will leave Apapa Port without 100 percent physical examination”

 

declares Auwal Mohammed as he takes over as new Apapa Customs Area controller

—promises to surpass N1 trillion revenue mark

—vows not to facilitate non-compliant traders

 

The Eyewitness reporter

Despite the deployment of cargo scanning machines, the new area comptroller of the Apapa command of the Nigeria Customs Service, Comptroller Auwal Mohammed, has vowed that no container shall leave the Apapa port without a 100 percent physical examination.

Comptroller Mohammed, who formally took over the mantle of leadership of the command Friday, 27th, January 2023, from Ag. Assistant Comptroller-General of Customs(ACG) Malanta Ibrahim Yusuf, said that the decision to subject all cargo to physical examination was meant to account for every content of container passing through the command and to maximize revenue returns to the Federal Government.

He, therefore, warned non-compliant traders to steer clear of the command as he would not facilitate their trade as he desired to surpass the one trillion revenue mark achieved by the command under the former area controller Yusuf.

”We shall continue to conduct 100 percent physical examination of cargo so that we can account for all the cargo in the containers and to generate more revenue so that we can surpass the one trillion revenue collection that the command has already achieved. No package, no container should leave Apapa port without a proper 100 percent physical examination.” the new Comptroller told his officers who had gathered to welcome him.

He continued ”Today marks another era in the history of the Apapa command of the Nigeria Customs Service. I am inheriting a well-structured area command. The level of achievements and status achieved under my predecessor will be sustained while I will look for all means to surpass them.

I am ready for the job. I am aware of the big shoe I am stepping into but I am well prepared for it”, Comptroller Mohammad said.

He, therefore, asked the officers to be at their utmost best to cooperate and work with him to sustain and surpass the legacies of his predecessor.

He also solicited the support and cooperation of stakeholders whom he promised to engage with and updated frequently on all issues and policies that will enhance their trade and performance of the command.

The new helmsman also charged all the releasing officers and the image analysts who will be conducting the scanning of cargo to be diligent and exhibit the utmost sense of responsibility and professionalism in their duty so as not to release uncustomed goods.

Mohammed, who was redeployed from Onne Port Area Command when he was the area controller, also enjoined the importers and their agents to be compliant with the cargo clearance procedural processes in order to enjoy a seamless cargo release.

”The goods clearance procedure is simple. Everything starts and ends with declaration and if there is a proper and correct declaration of cargo, there won’t be any need for delay and unnecessary interference with the process”, he admonished.

Earlier, the outgoing Area Controller, Ag. Yusuf, while handling over the operations and procedures of the command to his successor, solicited the support and cooperation of all the officers and other stakeholders for the new helmsman, urging them to avail the new comptroller of the same level of support, guidance, and cooperation and advice they gave him.

He also lauded the untiring efforts of his officers whom he said were instrumental in the monumental achievements recorded by the command under his watch.

Consequently, some officers who excelled in the discharge of their duties were commended and awarded certificates of merit, including the indefatigable Public Relations officer of the Command, CSC Abubakar Usman.

 

 

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