By John Saulnier, FrozenFoodsBiz Editorial Director
Seven weeks or more into the ongoing spread of the deadly novel coronavirus that broke out in the central China city of Wuhan, there are more questions than answers. What is not questionable, as the death toll from pneumonia-like symptoms attributed to the Covid-19 pathogen’s spread in the PRC topped 2,100 on February 20 (according to figures from the National Health Commission), is the brave and unfailing dedication of doctors, nurses, viral scientists and researchers engaged in fighting this dreaded scourge. We salute them one and all!
The respiratory disease has sickened more than 74,000 people nationwide, while beyond mainland China more than 1,100 cases of the contagion have been confirmed and eight people have perished. Tens of millions of inhabitants in the epicenter of the outbreak remain under government-imposed lockdown, and authorities in Wuhan instigated a three-day house-to-house campaign on February 17 to “round up” suspected infected persons not yet examined or officially diagnosed. Videos posted on the Internet of draconian measures already taken on the streets of Wuhan to corral the epidemic are heart wrenching.
Ten quarantine centers in eight districts across the city have been designated to receive those testing positive for Civid-19. According to the Chutian Daily newspaper, they will provide more than 11,400 beds for people displaying mild symptoms of the viral infection. In addition, makeshift facilities to accommodate patients are being set up at closed factories and transportation hubs.
In other major urban areas across the nation (among them Beijing, Shanghai, Guangzhou and the cities of Wenzhou, Hangzhou, Ningbo and Taizhou in the province of Zhejiang) many residents are pretty much holed up at home, venturing out on occasion to buy groceries or other necessities of life. While some people are slowly returning to job sites, those who can work at home are telecommuting to minimize the risk or viral infection.
Frozen foods are more popular than ever for at-home consumption as folks are unable or unwilling to dine at restaurants given the current environment. Indeed, frozen ready meals have played a very important role in nourishing and sustaining medical personnel tasked with working long hours on the frontlines in Hubei Province.
The value and utility of frozen food stocks is looming large during these trying times, as cold storage warehouses are being tapped to feed large populations. Here’s an excerpt from a report posted at Archyde.com on February 18 about contemporary life in Wuhan for Geneva native Emmanuel Geebelen and his Swiss-Chinese family:
“In supermarkets, everyone first tries their luck at the meat counter,” he said. “The demand for fresh meat is high, but the supply is scarce. On the other hand, there is no shortage of frozen beef or pork. The government has tapped its reserve and supplied frozen meat to supermarkets.”
Geebelen described the range of so-called fresh vegetables as good, though restrictions are in place.
“For a while I haven’t found pumpkin or peppers. And the selection of mushrooms remains limited. However, there are still around 15 types of vegetables, which is why we can prepare a varied meal,” he said.
As for the challenging food import-export business, the situation is quite chaotic as the logistics supply chain is under extreme pressure both internally and externally.
The Global Times online mouthpiece of the People’s Daily, the official newspaper issued by the Central Committee of the Communist Party of China, which rules the nation, reported on February 17 that the novel coronavirus crisis “is putting tons of fruits and vegetables in Southwest China’s Yunnan Province – an important agricultural product exporter to Southeast Asian nations – at risk of rotting as exports have been hindered by transportation problems.”
In addition to truck drivers having to cope with roadblocks erected by local residents in many townships and villages in an effort to prevent the entry of viral infection into their communities, which unfortunately also prevents the return of workers to job sites and traders from purchasing vegetables from farmers, they have faced customs clearance delays in Vietnam. This has sometimes resulted in rotted produce that can’t be sold or consumed.
On the waterfront, a lack of space to accommodate incoming refrigerated containers at seaports in mainland China has resulted in ships carrying upwards of 400 containers of frozen poultry from the USA being diverted to Hong Kong, Taiwan, South Korea and Vietnam, according to Reuters. This trade flow disruption is further fallout from the spread of the coronavirus, as the health crisis has resulted in the placement of imports of medical supplies, frozen and refrigerated pork (in short supply due to a huge culling of pigs infected with African swine fever last year) and other high-priority cargo at the front of the queue.
Reuters quoted Jim Sumner, president of the USA Poultry and Egg Export Council, as reporting that Chinese ports currently lack space for refrigerated containers, which must be plugged into electric power connections once offloaded from vessels. The diverted shipments include chicken and turkey meat as well as chicken feet.
On the export side, shipping volumes out the PRC have plummeted. An online report published on February 15 quoted Lars Jensen, head of consulting of the Copenhagen-headquartered Sea-Intelligence provider of maritime data and analysis, as stating: “Substantially less cargo is being moved between China and the rest of the world. Last week we had an additional 30 sailings canceled, with 23 across the Pacific and the rest to Europe.”
Meanwhile, on the trade war front, China is now offering tariff exemptions on 697 American products including pork, beef, soybeans, energy products, medical equipment and supplies. Importers may apply for one-year exemptions beginning March 2, according to the Customs Tariff Commission of the State Council.
On February 14, as part of the phase one trade deal between Beijing and Washington, duties were cut on hundreds of respective imports said to be valued at $75 billion for US exporters and $120 billion overall. Meat and poultry as well as seafood products including sole, plaice, pollock and lobster were included on the list.
The hellacious health emergency in China, East Asia and beyond has evolved into a political, social and global economic crisis with no end yet in sight. What is in sight, at last, is an international team of medical experts from the World Health Organization dispatched to assist in assessing and containing the pathogenic menace. However, as of February 19 they have not been allowed by the PRC government to inspect ground zero conditions in Wuhan or elsewhere in disease ravaged Hubei Province. So much for transparency.
Recoveries on Rise
On a much welcomed positive note it seems that the rate of reported coronavirus infection cases, which now stands at 61,682, is slowing in Hubei. Furthermore, according to the National Health Commission, 1,824 patients have recovered and either been released from the hospital or are soon to be discharged.
Let’s just hope and pray that figures derived from a model developed by the London School of Hygiene & Tropical Medicine, which suggest that one in five people in Wuhan could become infected and thus lead to over 500,000 cases before the contagion peaks, are wrong.
On the financial front, the Shanghai Composite Index and Shenzhen CSI 300 Index have recouped losses of about 8% that greeted the delayed post-Lunar New Year stock market reopening on February 3.
Food importers and exporters, as well as traders of shares as well as foodstuffs, are now watching closely to see how much time it will take for idle factories to gear up again and resume production in earnest. Most plant operators are still waiting for employees to show up for work, as it is estimated that less than one-third of the nation’s 291 million migrant labor force has yet to return from extended New Year holidays. FrozenFoodsBiz.com has been informed by buyers of food ingredients in North America that they have no idea when delayed orders will be filled, and thus are now looking for alternative sources of supply.
Oxford Economics, an international forecasting and quantitative analysis firm, estimates that the coronavirus crisis could cost the the global economy $1.1 trillion in lost income this year if it spreads significantly beyond Asia. That equates to a 1.3% reduction in previously anticipated growth.
However, Xi Jinping, general secretary of the Communist Party of China and paramount leader of the nation, is optimistic that industrial output will bounce back in due course. He reportedly told President Emmanuel Macron of France during a recent phone call that the impact of the coronavirus on the PRC economy is “temporary.”
The question remains just how long will “temporary” be in this case. A second question is just how long can or will the global economy continue to operate with so many supply chain eggs in so few baskets. We shall see.