Black Sea attacks: economists warn of higher costs for Bulgaria's trade
After drone attacks on cargo ships in the Black Sea, freight and insurance costs are rising, economists say. They fear higher prices and losses for farmers and ports.
Archive image · Photo: Alexey Komarov / Wikimedia Commons, CC BY-SA 4.0 (cropped and resized)
Following drone attacks on two merchant ships in Bulgaria's exclusive economic zone on 6 October, concern about maritime trade is growing. Economists do not currently see a major economic shock, but say risks for businesses are rising. Politician and economist Kuzman Iliev told broadcaster NOVA: "Since August, we have seen insurance premiums double." According to him, the ports of Varna and Burgas handle around 20 million tonnes of goods a year.
If insurers classify the Black Sea as a high-risk war zone, goods and services could become more expensive, Iliev said. He proposed expanding railways and motorways so that international companies do not bypass Bulgarian ports if shipping is restricted. Mikhail Krastev, executive director of the Union for Economic Initiative, said: "The Black Sea is a war zone, and security is insufficient." He said more than 200 ships have been hit since the start of the war in Ukraine.
According to the press review of news agency BTA, economist Preslav Raikov also pointed to higher freight and insurance costs, although shipping activity has not yet declined significantly. Nikola Hristov, a board member of the Bulgarian Association of Shipbrokers and Agents, warned that the military risk would ultimately be passed on to agricultural producers. They may have to sell at lower prices. "Our producers will be the hardest hit," he said.