May 2, 2022

 

Lockdown in Shanghai, China has slowed down the country's meat trade

 

 

China's typically robust meat sector is slowing because of the prolonged lockdown in Shanghai, China's financial capital, with tight COVID-19 procedures resulting in logistical bottlenecks across the food industry, a reflection of broader commercial disruptions, Reuters reported.

 

The difficulty of transporting food in and around Shanghai, where residents have been placed in a month of tense house isolation, exposes similar issues in many other Chinese cities as Beijing sticks to its contentious zero-COVID-19 goal despite mounting economic concerns.

 

China is the world's top meat importer, with more than 9 million tonnes worth $32 billion imported last year, and the financial metropolis with a bustling dining scene account for the majority of imports.

 

Traders rely on Shanghai's perfect position for delivering merchandise around the nation, but transferring chilled or frozen items has become an expensive issue since an outbreak of COVID-19 cases triggered a lockdown in the city at the end of March.

 

Soeren Tinggaard, vice president at the Pinggu Retail & Foodservice business for pork processor Danish Crown, said unloading containers is ok but the problem is logistics out of the harbour, getting trucks and drivers to pick up goods.

 

Many drivers have stayed away due to frequent COVID-19 testing, prolonged quarantines, and long clearance waits to enter Shanghai, while fewer refrigerated vehicles are available due to specific licence requirements.

 

Other food items, such as dairy and edible oils, have been detained at the Shanghai port, while beef imports into the city fell by 23% year-on-year in March. When combined with data from other cities subject to COVID-19 limitations, the data implies that food exporters such as Brazil, the US, and Australia are suffering trade constraints with the world's second-largest economy.

 

In March, when the lockdown was just beginning, Australian beef exports to China were down 10% year on year, while pork imports were down 70%.

 

Because of the logistics issues, pork imports might drop by as much as 30% this year, compared to an earlier forecast of 10%, according to Pan Chenjun, senior analyst at Rabobank.

 

Tyson Foods, a major US meat processor, announced this week that it had shifted beef exports to other markets until the situation improves. Brazilian exporters have cancelled shipments and ceased scheduling new cargo, a source told Reuters

 

Customers in other parts of China have been affected by the Shanghai port bottleneck.

 

Andrew Cox, general manager of international markets at Meat and Livestock Australia, located in Singapore, said all of these logistics challenges add costs to the supply chain, which contributes to food inflation.

 

Some traders are rerouting cargo to other Chinese ports, but delivery is delayed, and costs are rising as towns implement their own COVID-19 regulations.

 

When trucks arrive in Beijing, the goods are taken to designated central warehouses and tested for COVID-19. Some importers have been instructed that after the product is delivered, they must keep it for up to 14 days and do further COVID-19 testing.

According to another Beijing importer, Tianjin mandates COVID-19 testing on all chilled and frozen items, including one on the interior of the package.

 

-      Reuters