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Suez Canal receipts slide to $410.2 million in September - Daily News Egypt

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Suez Canal receipts slide to $410.2 million in September

CAIRO: Suez Canal revenues fell to $410.2 million in September from $436 million the previous month, according to a statement released by the Suez Canal Authority (SCA). Growth in revenues fell to 7.2 percent in September, down from a two-year record of 17.3 percent in August. The overall number of vessels passing through the canal …


CAIRO: Suez Canal revenues fell to $410.2 million in September from $436 million the previous month, according to a statement released by the Suez Canal Authority (SCA).

Growth in revenues fell to 7.2 percent in September, down from a two-year record of 17.3 percent in August.

The overall number of vessels passing through the canal fell to 1,513 vessels in September from 1,659 the previous month, with total tonnage following suit, dropping to 72.8 million from 78.3 million in August.

“We had expected a deceleration in canal revenues during the month of September, which is a seasonally slower month in terms of traffic. The canal revenue outturn, nonetheless, came in above our forecast of $370 million, reflecting a stronger improvement in global trade movements,” said investment bank Beltone Financial in an emailed statement.

“We expect a pick-up in canal revenues over the next three months to year-end as traffic activity rises boosted by discounts and incentives extended by the Suez Canal Authority to passing vessels,” the statement added.

“While transit fees are expected to remain unchanged for the remainder of 2010, we do, however, expect an increment increase in transit fees starting in 2011, when the global economic recovery and trade movements may reflect a more sustained improvement,” Beltone predicted.

According the Economist Intelligence Unit (EIU) Country Report for September 2010, “Traffic through the Suez Canal increased by 20 percent in the first half of 2010, and revenue by 12.5 percent, although 2009/10 still recorded a small overall decrease.”

According the report, the revenue growth was a result of a 20 percent increase in tonnage shipped through the canal. Nonetheless, revenue for the full year, at $4.5 billion, was still slightly below the $4.7 billion achieved in 2008/09.

The EIU report quoted Beltone Financial’s prediction that revenues in 2010/11 would reach $4.9 billion as the recovery in global trade continues.

“The global decrease in the consumption of consumer goods, particularly those imported from China, has had a significant impact on the Suez Canal since the beginning of the economic crisis,” the report said.

The report explained that when the number of ships passing through the canal dropped by 9.6 percent in 2009/10, the SCA responded by freezing transit fees until the end of 2010 — they had previously been increased annually for several years — and lowered tolls for certain types of ships, such as gas tankers, which can benefit from a 10-15 percent discount.

The report added that the SCA boosted the East Port Said container terminal at the canal’s northern end by announcing discounts of up to 30 percent on feeder vessels (ships carrying cargo between container terminals for loading onto bigger vessels) in July 2010.

The EIU expect revenue growth to pick up as global trade, and thus earnings from the Suez Canal and customs duties, recovers.

They also expect Suez Canal receipts and a revival of tourism to lift foreign exchange reserves, allowing the Central Bank of Egypt (CBE) to intervene to prevent sharp swings in the exchange rate. The report finds that as the Egyptian tourism sector and traffic through the Suez Canal gradually pick up from 2010, Egypt’s services balance would improve.

 

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