Container fares to West Africa increased due to huge shipment of rice

05-Dec-2024 01:51 PM

The recent increase in container fares from the Indian subcontinent to West Africa is primarily due to the surge in rice exports to the region.

West African countries are importing large quantities of rice from India, creating a significant demand for shipping containers, which in turn is causing a shortage of available space on ships for other types of cargo.

The container freight rate for shipments from India's east coast ports, like Visakhapatnam (Vizag), to West African destinations such as Cotonou and Lome has risen by about 22% from October to November.

In October, the freight rate was $1,900 per TEU, which increased to $2,400 per TEU in November, and these rates are expected to remain high through December and January 2025.

Despite falling container rates on other trade routes due to the holiday season, West Africa's demand for rice has created a peak season for shipments, leading to a spike in freight costs.

The shortage of shipping space is compounded by limited handling capacity at ports, which has led to the deployment of smaller vessels on the India-Africa sea route. With new rice consignments arriving and prices being attractive,

the demand for Indian rice in West Africa is strong, further driving up container fares. Importers are prioritizing rice shipments, given the attractive export prices and the growing pressure on shipping resources.