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You'll find all the links and details in the show notes. Welcome to the Daily Coffee Pro by Mapper Forward friends. I'm your host Lee Safar and this is episode two of a five part series with just me. In this series, we're talking about what the Middle East conflict means for the global coffee industry during this time of this very serious war that has the potential to break into a much wider global conflict.
This is deeply going to deeply impact is already deeply impacting the coffee supply chain and the coffee value chain. In this episode, we're going to talk about the shipping crisis and how going to detail about how coffee moves through the world. As I mentioned in the last episode, I am doing this series from Australia. It is going to be some time from all indications before I can go back to Dubai.
So for the foreseeable future, there are some people that are saying that this conflict could go on for six months or even longer. So I will be doing the podcast from Australia in that meantime. It's business as usual for Mapper Forward. We have some exciting things that are going to be rolling out this year that will continue to happen.
But in the meantime, we will be spending a lot of time with the programming of this podcast focusing on the very real impacts that this conflict is going to have on the global coffee supply chain. Now, if you are somebody who has been listening to this podcast for a long time, at least since COVID, and perhaps before that, I suspect that you have already become very familiar with all of the muscles that you're going to need to be able to adapt to this conflict. I am quite perplexed. For those who follow us on social media at mapbeforeword.coffee on Instagram and on our YouTube channel and my LinkedIn, you will be familiar with how perplexed I am when I am going for doing my walk-and-talk videos.
How perplexed I am by why more people are not seriously disturbed or at least reacting and focusing very heavily on this conflict. This conflict has deep implications for our industry, and I am very confused by why more people are not talking about it. So I hope that this will be a series that helps people understand why they should be really, I don't want to say panic does not the right thing, but people should be hustling to prepare themselves so that once this does reach full peak panic mode like what happened in COVID, you don't have to be in with the bulk of the people that are reacting. I remember when COVID happened, I talked about this analogy about the dragon is coming, the dragon is coming, and when the dragon was far away, we warned people, and we said to them, listen guys, we think this is going to be something big.
And people said, no, it's not, the government will take care of it, don't worry about it. And then the dragon got closer, and it was like, hey guys, can't you see it yet? The dragon is coming, the dragon is coming, the dragon is coming, and people said, I still don't see anything, but some people did, and they started acting. By the time most people were listening to what we were saying about the dragon is coming, the dragon being COVID and the disruption it would bring with it, the dragon had already burnt the village down, and this is another one of those times.
This is us saying to you, this is going to have massive implications for coffee industry. Just with what's happened to date, it is going to have massive implications for the coffee industry. The longer this conflict goes, the more significant the implications are going to be for the coffee industry. So I implore you, please start looking at the things that we're talking about in this series and start figuring out how that is going to impact you in every part of your business, in every part of the ecosystem that you operate in, that is your supply chain, that is your employees, that is on a governmental level, a policy level, logistical, economic, everything.
Okay, so we're talking about shipping and the shipping crisis here, and we're going to start really focusing on how coffee moves through the world. So 80 to 90% of the global trade of everything moves by sea all over the world. 80 to 90% moves through the sea. Okay, so the geography of coffee trade matters.
It matters enormously. Why? Because the parts that coffee has grown in the world, and it's not just coffee, again, I want to reiterate this by saying everything that you require to be shipped to you for your business, or exported of your product. It's the likelihood of it, is that it's going to be shipped by sea, and understanding the geography of those shipping routes is going to be very important.
So Latin American coffees, they cross the Atlantic directly to Europe and North America, while many, many African and Asian coffees depend on the Red Sea corridor, again, not just the coffees. But if we're going from Asia, and we are heading up into Europe, in order to save money and time, they go through the Red Sea corridor. When that corridor becomes unstable, the risk is not shared equally across the coffee world. Okay, the risk is being born by the middle section.
Okay, the consequences are going to be felt by the receiving end, but the risk is going to be born by the exporters and the importers. Okay, now we mentioned three important bodies of water that in the last episode, that are really important for you to understand. We're going to dig deeper into why those are really important. So those three bodies of waters, and they control a huge amount of the global trade, not just the coffee, global trade in general.
It's the Strait of Hormuz, the Bab El Mandib, and the Suez Canal. So the Suez Canal, as we were talking about, is connected to the Red Sea corridor. Okay, so let's start with the Strait of Hormuz. Now, the Strait of Hormuz is responsible for approximately 20% of global oil trade.
Let's say that again, 20% of global oil trade comes through the Strait of Hormuz, and we talked in the last episode very generally, like we touched on it, how much energy is needed across the entire supply chain, in order for us to do everything. So 20% of global oil trade, 25% of the world's natural gas supply comes from, is shipped through the Strait of Hormuz, it comes from West Asia, and 35% of the world's fertilizers come from the Middle East, particularly Urea, which is used for nitrogen fixing. All of that travels through the Strait of Hormuz. Now, guys, it's really important for us to understand that many, many crops around the world are either being planted right now or soon to be planted.
In preparation for the colder months, there's going to be a lot of fertilizer that's got, sorry, in preparation for the warmer months, it is important for that fertilizer to be ready. Now, we have guests planned to talk about all of this, we're recording all of those series as we speak, but what's really important to understand is, right now, a lot of the harvests are at the end or wrapping up, so the fertilizers aren't going to be important for that, the 2026 crop, but they will be very important for the 2027 crops. The shipping is going to apply more to, the shipping issues will apply more to the 2026 harvest. So now let's talk about Babimandip.
Babimandip takes 10 to 12% of the global trade, okay, and Babimandip is very important as you want to get up from Asia up into the Red Sea corridor, okay, it connects all of that. And as a part of the Red Sea corridor, we've got the Suez Canal, which we've talked a lot about, and that also takes 12% of global trade. So these three bodies of water connect Asia to Europe and Europe to Africa. So it's very important, trade goes both ways, it's important that they're interconnected with each other, okay, so the Red Sea route alone carries an enormous amount of that container trade.
Now, even though the canal represents only about 12% of maritime trade, right, so if we look at it, as we mentioned, 12% of the global trade goes through that on a global level, but when we're talking about Asia to Europe trade, it is a huge amount of that trade is going through there. So 12% on a global level, but much, much, much higher if we're looking at just between Asia and Europe. Now, when we're talking about Asia, we obviously, we can't talk about Asia without talking about China. And China is a significant manufacturer, it is in fact the manufacturing hub of the world.
And so we cannot dismiss how much of the trade that how heavily Europe depends on China for a lot of the goods that are sold there. If you think if you are a cafe owner in Europe and you look at all the merchandise that's on your shelves, I'm sure the majority of it in order for it to be effective enough from a pricing perspective for you to afford to sell it, a lot of it comes from Asia. If it's coming from Asia up into Europe, it is going through the Red Sea corridor up through Baba Mandib into the Red Sea, into the Mediterranean Sea, and sorry, through the Suez Canal into the Mediterranean Sea and towards you. Again, as I mentioned in the last episode, spend some time with the map.
I have always been terrible at geography, but I'm really grateful that I got to do this series because I spent a lot of time actually trying to understand what these trade routes are. And everything that you get from Asia is going to be significantly more expensive if these routes are closed and they will be closed or affected because of their proximity to South Africa, not South Africa, sorry, Saudi Arabia, and to the turmoil that's happening in Africa. So what we have seen is that all of this is going to have to think of another way to come. You've got what's happening in Israel.
Israel is right at the top of the Suez Canal, right on the edge of the Mediterranean Sea, Lebanon is there, all of the conflict that's happening there is escalating and it will impact. So what happens is that insurance companies just don't want to ensure ships anymore, the cost of shipping, the risk of shipping, all of that causes the price to go up. So let's dig a little deeper into some of these trade routes. So let's talk about the Red Sea.
Now, if again, we'll use an example. So if we've got Ethiopia, Ethiopian coffee heading to Europe, the trade route that that will take, the shipping route that that will take is it will leave Djibouti, it will go into the Red Sea up into Egypt, which is where the Suez Canal travels and it will go through the Suez Canal into the Mediterranean Sea and from the Mediterranean Sea, it makes its way up to Europe. If there are attacks on ships and they have caused those ships to no longer go to that region because a lot of ships are avoiding that region right now. As we mentioned, what will happen is that instead of going up into the Red Sea corridor to get through that channel, the Suez Canal and up to Europe, it will then instead Ethiopia will have to go down around the Cape of Good Hope and it will take a 10 to 14 days of travel extra, thousands of nautical miles and a huge amount of extra fuel.
Remember, energy is going up. That's what will happen if we look at just disruptions in the Red Sea Canal. Now, when ships have to reroute, we're looking at many, many domino effects from the rerouting, so it's not just that we're going to have delays in delivery times because of the extra miles that are going to be travelled, but what we're also going to see is the actual cost of the freight prices will increase. We will also have fewer shipping containers available.
We're going to see caught congestion increase significantly and we're going to have disruption of delivery times and by disruption, what I mean, I don't just mean that they're going to take extra time. I mean that the disruption will become significantly unpredictable. So if you are a roster, that's in Europe and you are expecting coffee to arrive in April because the Ethiopian harvest has wrapped up. You've got some coffee on the water and it's headed to you.
You did everything that you needed to do, given the coffee crisis that's going on, you paid for your coffee, you got it on the water early, you were trying to get it there. It may now arrive in May or June when it was supposed to arrive in April. Now that kind of disruption on top of everything else that was going on before this conflict started is it's paralyzing for a lot of business owners. So it's also very important to remember that not all coffee supply chains are going to be equally disrupted.
So we want to make sure that we present a very balanced perspective on this. So one interesting consequence of the current conflict is that Latin American coffees that are traveling across the Atlantic to Europe or North America will largely avoid the Red Sea corridor, but coffees moving from East Africa or parts of Asia towards Europe rely heavily on these routes. So if you are getting coffee from parts of Asia or Africa, East Africa headed towards Europe, that's important for you to remember. But if we're looking at coffees from Latin America heading towards Europe, not such a big deal.
Also obviously going from from Latin America to North America, not so much of a problem. But Europe is a massive consumer of goods and this and particularly coming from Asia, this is going to be huge for the conflict. So while coffee doesn't become expensive because farmers are, it's not the only reason if farmers are increasing prices, right? We've talked a lot about the fact that farmers aren't getting paid enough of the share of a bag of rest of coffee.
And this is where I want to speak to coffee farmers and any coffee farmers that are listening, please hear me right now. And I've tried to do a good job of this over the nine years of our podcast to help farmers understand that do keep saying rightfully that they're not making enough money. How come coffee roasters are getting paid this much a bag or why cafes are getting paid this much a cup when in fact coffee farmers are getting paid a tiny fraction of that. What's important for you as a farmer to understand is what we're talking about here.
These are all the things that add on to the price of coffee as it lit from the farm gate. All of these increases in energy are going to increase the price of coffee once it leaves the farm as it moves through a country, energy prices are increasing, shipping prices are increasing, shipping risk is increasing, which is driving up the price of insurance. The risk is going up, so financing is getting more expensive. Delays are happening, so more interest is going to be paid on loans when they haven't been paid back in time or the goods haven't been received in time for them to earn the money to pay the loan so the loan is gone for longer.
A lot of issues are happening here. People have to take out more lines of credit to manage their risk. So unfortunately, while coffee farmers, it is important that we pay them what they deserve. It is also important for us to understand the coffee isn't becoming expensive just because coffee farmers need to be paid more.
There is a lot that's going on right now. If you are a smaller business or a medium-sized business, what I like to call an independent part of the independent sector of our industry, your exposure in these times is going to be much greater. Why? Because the corporate side of our industry can hedge against all of this.
So, in the next episode, guys, we're going to talk about who's going to get hit first in the coffee value chain because of this crisis and dig really deeply into how that's going to move through how that risk is going to move through the supply chain. So join us for the third episode of this series. Peace, love and peanut butter, have an amazing rest of your day. If you enjoyed this episode, consider supporting Mapper Forward, our guests and advertisers on social media.
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