Amidst Red Sea crisis, Malaysia to pay more for gourmet food and wine due to rising import costs

Gourmet foods and fine wines, often sourced from diverse corners of the globe, are particularly vulnerable to these disruptions, leading to increased costs that are likely to be passed on to consumers.

Malaysians are set to experience a surge in the prices of gourmet food and wine as import costs rise in the wake of the Red Sea crisis. Experts have warned of the risk of wide inflation as Houthi militants continue to suppress the Red Sea shipping lane. Eventually forcing vessels to travel to and from Asia. The people of Malaysia will likely have to pay more for the imported luxuries which include wine and gourmet food that were being shipped from Europe.

The Houthis, an Iran-backed rebel group in Yemen, have been earmarking ships seen as linked to the United States and other allied nations of Israel. The Houthis said that their rocket, drone, and speedboat raids on the container ships passing the sea around Yemen, are nothing but an act of solidarity with the Palestinians in the Israel-Gaza war. The Red Sea crisis, marked by heightened geopolitical tensions and maritime disturbances, has disrupted the smooth flow of goods across crucial shipping lanes. The resultant increase in transportation costs and potential delays has set the stage for a noticeable spike in the prices of these luxury goods.

To avoid possible attacks in the Red Sea, several shipping giants have shifted the route to the Cape of Good Hope around Africa’s southern tip. Importers and distributors in Malaysia are grappling with the challenges presented by the Red Sea crisis. Gourmet foods and fine wines, often sourced from diverse corners of the globe, are particularly vulnerable to these disruptions, leading to increased costs that are likely to be passed on to consumers.

As per the data from the Maybank Investment Banking Group (MIBG) the container shipping rates over the Asia-Europe routes have escalated by over 600 per cent since the beginning of the war in Gaza. This is making it difficult for the importers in Malaysia to keep costs down. A business owner who imports European wines asserted, “If we need [new stock], we will import. But the costs will have to be passed on to the consumer.” Suhaimi Ilias, who is chief economist with MIBG said, “For Malaysia, this could raise costs and cause supply chain delays or disruptions in key imports from Europe for sectors/industries such as chemicals, machinery, and auto.”