Shanghai lockdown chills meat trade

BEIJING: The prolonged lockdown in Shanghai, China’s financial hub, is slowing the country’s normally booming meat trade, with strict Covid-19 measures causing logistical bottlenecks in the food industry, a sign of growing disruption Business.
The challenge of transporting food to and around Shanghai, whose residents are in stressful month-long home isolation, highlights similar issues in many other Chinese cities as Beijing persists with its controversial zero- Covid despite growing risks to its economy.
China is the world’s biggest buyer of meat, bringing in more than 9 million tonnes last year, worth around $32 billion, and the financial hub with a thriving foodie scene accounts for most of it. imports.
Traders rely on Shanghai’s convenient location to distribute goods nationwide, but since an outbreak of Covid-19 cases forced a lockdown in the city in late March, moving chilled or frozen goods has become an expensive headache.
“Container unloading is actually okay. The real issue is the logistics out of the port, getting the trucks and drivers to pick up the product,” said Soeren Tinggaard, Vice President of Pinggu Retail & Foodservice. for the Danish Crown pork processor.
Frequent Covid testing, lengthy quarantines and long customs clearance times to enter Shanghai have kept many drivers away, while fewer refrigerated trucks are available due to special licensing requirements.
IMPORTS UNDER PRESSURE
Other food items, including dairy products and edible oils, are also stuck in Shanghai’s port, while beef imports into the city fell 23% year-on-year in March. Taken with other cities under Covid-19 restrictions, the data suggests that food exporters like Brazil, the United States and Australia are facing pressures on their trade with the world’s second-largest economy.
Australian beef exports to China fell 10% year-on-year in March as the lockdown had just begun, while overall pork imports fell 70%.
Pork imports could plunge as much as 30% this year due to logistical issues, from a previous estimate of 10%, said Pan Chenjun, senior analyst at Rabobank.
US meat processor Tyson Foods said this week it had diverted meat shipments to other markets until the situation improves. Brazilian exporters canceled shipments and stopped booking new shipments, a source told Reuters.
Port congestion in Shanghai has also impacted customers elsewhere in China.
“Since April 1, I haven’t had a single piece of meat,” said a Beijing-based trader who normally receives about 3 million yuan ($453,995.16) worth of beef every month from Shanghai.
A two-ton shipment of chilled American beef worth about 400,000 yuan that arrived more than a month ago is of concern, the trader said.
“If it’s still there after 70 days, most of my clients won’t want it anymore,” he said, declining to be identified due to the sensitivity of talking about Covid measures.
‘NEW CHALLENGE’ EVERY DAY
For now, significantly lower consumption due to Covid restrictions is keeping prices capped, although this could become an issue the longer the shutdowns last.
“All of these logistical issues are driving up costs in the supply chain, which ultimately leads to food inflation,” said Andrew Cox, Singapore-based managing director of international markets at trade body Meat and Livestock Australia.
Some traders are re-routing their goods to other ports in China, but deliveries are slow and even then costs are rising as cities roll out their own enhanced Covid protocols.
For trucks arriving in Beijing, the product is routed to designated central warehouses where it is tested for Covid-19. Once released, some importers were told they had to keep it for up to 14 days and carry out more Covid tests.
Tianjin requires Covid testing on all chilled and frozen foods, including inside-package testing, another Beijing importer said. For a bag of Wagyu beef worth around 2,000 yuan, that’s a lot of wasted money.
“Every day brings a new challenge for the F&B industry,” he said.

Leave a Comment