How Attacks on Shipping in the Red Sea Impact The Tissue Market in Africa and Middle East?
Red Sea is a vital route for oil and fuel shipments, but it has become a hotspot of conflict and insecurity. The Houthi rebels in Yemen, backed by Iran, have been attacking commercial vessels, especially those heading to Israel, in response to the war in Gaza. These Attacks have disrupted the shipping industry, affecting global trade and supply chains.
The tissue market in Africa and the Middle East is one of the sectors impacted by the Red Sea Attacks. According to Markwide Research, the tissue paper market in Africa is expected to grow at a 6.2% CAGR from 2020 to 2025, reaching USD 2.4 billion by 2025. The main drivers of this growth are the increasing population, urbanization, hygiene awareness, and disposable income. The Middle East is a major exporter of tissue paper to Africa, with more than 40% market share in 2019.
However, the Attacks in the Red Sea threaten the tissue trade between the Middle East and Africa. Tissue World Magazine reports that the Middle East’s tissue industry has been transforming, with new investments, expansions, and innovations. The region has the potential to become a global hub for tissue production and consumption, as well as a key supplier to the African market. However, the region also faces challenges, such as political instability, environmental regulations, and raw material availability.
The Red Sea Attacks adds more complexity and uncertainty to the Middle East’s tissue industry, as it affects the transportation and logistics of the tissue products. Many shipping companies have suspended or diverted their routes, increasing the costs and risks of the trade. For example, BP, the world’s largest oil company, has paused all oil shipments through the Red Sea after recent Attacks by the Houthis. Other major shipping companies, such as Maersk, MSC, CMA CGM, and Hapag-Lloyd, have also taken similar measures. The situation is “alarming” and “serious”, according to the industry players.
The Red Sea Attacks also creates opportunities and challenges for the tissue exporters from China, who compete with the Middle East for the African market. China is one of the world’s largest producers and exporters of tissue paper, especially tissue mother rolls, which are the raw materials for converting into finished tissue products. YuanhuaPaper, a leading tissue paper manufacturer in China, has over 20 years of experience in producing and exporting tissue paper products, including tissue mother rolls, to many countries, such as the USA, Mexico, Peru, Chile, UK, Poland, Japan, Korea, Thailand, Vietnam, Dubai, South Africa, Ghana, Uganda, etc.
The Red Sea Attacks may offer an opportunity for the Chinese tissue exporters to increase their market share in Africa, as they may offer more competitive prices and reliable delivery than the Middle Eastern suppliers. However, the Chinese tissue exporters also face challenges, such as the quality standards, the customer preferences, the trade barriers, and the environmental concerns of the African market. Moreover, the Chinese tissue exporters may also be affected by the Red Sea Attacks, as they may have to reroute their shipments via the Cape of Good Hope, which is longer and more expensive than the Red Sea route.
In conclusion, the Red Sea Attacks has significant implications for the tissue market in Africa and the Middle East, as it disrupts the trade and supply chains of the tissue products. The Attacks poses a threat to the Middle Eastern tissue industry, which is a major exporter to the African market, as well as a challenge to the Chinese tissue industry, which is a competitor and a potential alternative supplier to the African market. The Attacks also creates an opportunity for the Chinese tissue industry, which may leverage its advantages in production capacity, cost efficiency, and market diversification. The future of the tissue market in Africa and the Middle East depends on how the Red Sea Attacks evolves and how the tissue industry players adapt and respond to the changing situation.
