Yemeni Blockade Hurts Israeli Potash Exports, Causing Major Losses for Chemicals Company
NYN | Reports and analyses
The Hebrew economic newspaper The Marker has revealed that Israel’s chemical giant, ICL, has incurred substantial losses due to the maritime blockade imposed by the Sanaa-based Yemeni government on Israeli maritime routes. This blockade, which has shut down the port of Eilat, has significantly impacted ICL’s potash sales, as the port was a primary export channel.
In a report published Tuesday, The Marker stated that the company’s operating profits fell in the third quarter of this year, mainly due to a sharp increase of $13 million in shipping costs compared to the third quarter of 2023. The report explained that the blockade has forced the company to reroute its potash exports to East Asia via a longer route around Africa, doubling shipping expenses and severely impacting revenues.
According to the report, the company’s revenues dropped by $96 million in the third quarter of this year. Additionally, shifting exports to the port of Ashdod has delayed the shipment of 120,000 tons of potash to Brazil and the United States, as the company awaits the expansion of Ashdod’s export capacity, which currently lacks readiness for high-volume shipments.
The report highlighted that these delays have cost the company around $70 million in lost sales, with potash division profits down by 53% and revenues down by 26% due to decreased sales.
The Marker previously published a report in November last year regarding the impact of the vessel Galaxy Leader’s detention on the Israeli economy. The report warned that ICL, owned by businessman Idan Ofer, could be among the hardest-hit companies if the Red Sea blockade persists, as the company heavily relies on Eilat to export potash to East Asia, particularly China and India.
In its earlier report, the newspaper stated that Sanaa’s control over the Bab al-Mandab Strait might force the company to switch to Ashdod port, which would increase shipping costs, prolong export times, and create obstacles for ICL in the Indian market—a traditionally lucrative market due to its proximity and low shipping costs.
In a January report, The Marker also noted that the blockade had pushed ICL’s stock to its lowest level in three years, dropping by 15% since the onset of the conflict. Other reports indicated that the shutdown of Eilat port, caused by the blockade, has dealt a severe blow to Israel’s potash export industry and the car import sector, both of which depended heavily on this port.
