The extended lockdown in Shanghai, China’s financial hub has reportedly slumped the country’s booming meat trade, as well as stringent COVID-19 measures taken by the government of China, is causing logistics logjams across the food industry, and thus widening disruptions in businesses.
Shanghai along with many other cities in China is facing the challenge of moving food in and around the areas as Beijing continues to persist with its zero-COVID strategy despite mounting risks to its economy.
Notably, China is the world’s largest meat importer whose purchases last year accounted for over 9 million tons worth USD 32 billion, out of which Shanghai holds the biggest portion of imports.
Moreover, traders depend on Shanghai’s ideal location for distributing food products around the country but ever since the COVID-19 curbs, moving frozen or chilled food products has become a costly affair.
Søren Tinggaard, the Vice President, Pinghu Retail & Foodservice at Danish Crown cited that unloading containers weren’t the real issue, the main concern was getting drivers and trucks to pick up the products and operate logistics out of the harbor.
Interestingly, lengthy quarantines, periodic COVID-19 tests, and extended clearance duration for entering Shanghai have kept truck drivers at bay while only a few refrigerated trucks were given access due to a special licensing requirement.
Meanwhile, other food products like dairy and edible oils are also stuck in Shanghai port whereas beef imports into the city have slumped by 23% year-over-year.
For those unaware, food exporters like Australia, U.S., and Brazil are being pressurized on their trade with the world’s second-largest economy. The beef exports from Australia to China fell by 10% while pork imports fell by 70% ever since the COVID-19 lockdown commenced in March.
While the sharply lower consumption caused by the restrictions is keeping prices under control, it may become a problem if the lockdowns continue, which is why some traders are diverting products to other ports in China. However, even there the shipments are slower, and prices are soaring, as cities implement their COVID-19 guidelines.
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