The Saudi Gazette issued a business report on Sunday Feb, 22nd, stating that several Saudi companies have stopped exporting goods to Yemen due to unstable political conditions, especially after control of the capital Sana’a fell into the hands of Houthi rebels nearly two weeks ago.
It is estimated that 25 percent of cargo companies in the Kingdom are refusing to transport goods to Yemen, citing the volatile situation there, Al-Eqtisadiah daily reported.
Many companies no longer view bank guarantees, presented to them through letters of credit, as insufficient and require that all goods be bought on a cash-in-advance payment basis.
Muhammad Bajsair, owner of a pharmaceutical company and exporter to Yemen, said exporters are facing hardships i due to the instability in the Arab country. He further said during the past two weeks they have not exported any goods to Yemen due to difficulties in shipping and transportation.
“Before the takeover of the capital, the situation was stable with regard to exporting, but in the past two weeks we have not exported any goods and do not see any possibility of sending goods to Yemen overland,” he said.
Bajsair said exporters have taken several measures to protect their interests with their Yemeni counterparts. Most important among these is immediate cash payment instead of letters of credit. Shipping agents in Yemen are required to visit the Kingdom and pay cash to the company before goods are transported to them.
He said exporters suffered losses earlier when they had to export to Arab countries facing political instability. “There have been some difficulties in bank guarantees and money transfers from these countries. This forced some agents to transfer money through third countries.”
Said Al-Bassami, Deputy Chairman of the National Committee for Transport, said 25 percent of companies transporting goods to Yemen have stopped do so to ensure the safety of their drivers in the current conditions in the country. He added that there is reluctance by companies to transport goods or passengers to Yemen due to the situation there.
Saleh Omar, a Saudi investor in Yemen, said all Saudi investments in Yemen have been affected by the recent developments. He added that the country is passing through difficult circumstances and that the law and order situation is uncertain.
“Under the current circumstances, it is impossible for Saudi investors to protect their interests. This matter has been raised through the Saudi-Yemeni Business Council but the council has not come up with any solutions to safeguard the rights of Saudi investors,” he said.