The Wednesday Letter #222 - 5/29/2024

This Week: Maritime Chokepoints; Trifecta States; Robusta Coffee; Medtronic Stagnation; Nvidia to the Moon.

MARITIME CHOKEPOINTS

We mentioned in previous posts the many potential or actual chokepoints for ships transiting from one maritime region to another. The most recent flashpoints are the Red Sea, the Strait of Hormuz, the South China Sea and the Panama Canal.

Looking at each in turn, passage through the Red Sea is hindered at its southern end by Houthi attacks on ships navigating the Strait of Bab El-Mandeb (literally, the ‘gate of grief’ or ‘gate of tears’); the Strait of Hormuz is the main route for a huge quantity of oil being exported by Iran, Iraq, and the Arab Gulf states; China’s dependence on the Strait of Malacca is one of the reasons that it seeks to impose its control over the South China Sea; and the Panama Canal is seeing unusually low waters that have reduced the number of ships able to pass through every day. Each of these is vital for global trade and for the free movement of ships seeking the most efficient travel routes.

Although the four mentioned above are now the mo…