Freight Costs from UAE, China Rise Up to Fivefold, Adding Pressure to Maldives Prices

Freight charges on key import routes from the United Arab Emirates and China have risen sharply, with some rates increasing by as much as fivefold, adding to the cost of goods imported into the Maldives.

STO Chairman and Lily International Managing Director Amir Mansoor said the increase in shipping expenses was among the main factors contributing to higher prices in the country.

Speaking on the Economic Ministry’s PSM programme Two Sides of the Economy, Amir said discussions around rising prices often overlook the underlying costs faced by importers.

“I agree prices are rising. But nobody explains why on any platform,” he said.

Amir said the Maldives imports a large share of its goods from the UAE and China, where freight charges from some ports have increased significantly.

“We import most goods from the UAE and China. Freight from some ports in these two countries has jumped two, three, four or even five times compared to earlier rates. All of these costs are reflected directly in the final price,” he said.

He said freight rates from some ports in the UAE had increased fivefold.

The cost of transporting refrigerated cargo from China has also risen considerably, Amir said, noting that shipments which previously cost around USD 4,000 now cost between USD 8,000 and USD 9,000.

In addition to higher freight charges, longer transit times are further increasing import costs.

“Another component is delivery time. Shipments that used to arrive within a month now take two to three months in some cases due to war and rising fuel costs. This also has a significant impact on prices,” Amir said.

STO Managing Director Ibrahim Shimad also highlighted the impact of rising freight costs and shipping delays on the supply chain.

Shimad noted that Maldives State Shipping (MSS), a subsidiary of STO, operates services between Colombo and Malé. He said disruptions to international shipping routes can extend transit times and increase the overall cost of transporting goods to the Maldives.

He also pointed to additional expenses associated with fuel imports amid conflicts in the Middle East.

According to Shimad, tankers entering certain high-risk areas are required to purchase war-risk insurance, adding to the cost of fuel shipments.

“Those insurance policies are sold for a minimum period of one week. Even though our transactions with Oman do not require a full week, we are still forced to purchase insurance for the entire period,” Shimad said.

The higher freight rates, longer delivery times, rising fuel expenses and additional insurance costs are ultimately reflected in the prices of imported goods in the Maldives, according to the officials.