Coronavirus and China Market Update

The following information is provided by the Seafood Trade Advisory Group (STAG) as an industry market intelligence service to its subscribers. Efforts are made to verify the information however this is difficult given the current market situation. Readers should verify the information independently before taking any action based on the information provided.

Freight availability and cost – impact on businesses

Freight availability and cost is an emerging issue as many airlines are reducing their flights into and out of Australia. We have heard reports of freight rates being charged at up to four times the pre virus rates. Some exporters report being charged a “Covid19 levy” of between 8% and 10%.

Seafood Industry Australia (SIA) are collating information about the impact of the increased freight costs on seafood businesses. Please click on the link here and let SIA know how your business is being impacted. This information will help inform government policies and particularly the development of business assistance packages.

Information about seafood safety and COVID19

Source: Seafood Headlines, accessed 13th March 2020

Seafood Safety and Covid19 website provides some helpful information, frequently asked questions (with great authoritative references from international food safety authorities) and key messages, all focused on seafood safety and Covid19.

Global seafood market impacts

Source: Various pers. comm.

The severity of impact is highly variable and is dependent on the product format/market mix, with those companies more focused on a single product single market more at risk. The ability to withstand the disruption is also highly variable and dependent on individual company structure and finances. We note that most fisheries authorities have taken measures to assist industry (e.g. rollover of quota or changes to quota years).

Seafood appears to be one of the most effected industries, within the primary food production sector. There is significant and ongoing market volatility globally. Demand and orders from alternate markets to China remains limited and at significantly reduced prices The situation is changing daily.

China

China market is showing signs of a slow recovery. Significant pressure on exporters to sell at reduced prices due to Coronavirus. Prices are fluctuating and uncertainties in the market means that any live seafood demand is quickly filled.
Importers in China are optimistically predicting that demand and orders will start flowing in April/May. Note that there are stockpiles of seafood product in China.
We have reports that some restaurants are opening in some cities but with some restrictions pending government changing current bans on group dining.
Demand for cook at home and ready-made meals is stable or slightly increased.

Australian Domestic Market

Australian domestic market is variable.
Demand from food service sector is down while retail sales in some markets do not appear to be impacted.
Reports that with tourism numbers down, China Town districts in Melbourne and Sydney are very quiet, so demand is also down there. Some well-known restaurants have closed.

Japan

Demand in Japan for premium food items (e.g. Wagyu beef and Southern Bluefin Tuna) has fallen dramatically. Reports that tuna prices in Japan are down about 30% year on year.

China market recovery plans

Source: Austrade China 9 March 2020

Austrade have a China sectorial recovery marketing and communications strategy with key themes and messaging as follows:

We stand by each other and will overcome this crisis.
Australia and China have a strong resilient relationship based on complementary economies.
The impact is significant, but we will overcome and grow together to support long-term prosperity.
Our relationship is much more than just business or commercial cooperation. It is based on strong people-to-people links and relationships that are about assisting each other to proper, innovate, collaborate, research and educate.

This is consistent with the key messages discussed in the STAG partnership meetings.
A key part of the strategy is content creation. Austrade is preparing articles and posts supporting and reinforcing examples of Australian-China cooperation, so would like information from the seafood industry that is relevant to this topic as it would be useful.
Materials in rich media format - images, short videos, animation, infographics that make the stories look interesting would be appreciated.
Austrade may develop this content into formats that are easy for the consumer to interact with and go viral.

Action: Industry, government and researchers are asked to submit content (together with any restrictions for use and/or required acknowledgements) to admin@seafoodtradeadvisory.com

Note: Company and organisation logos and branding may have to be removed. The content needs to be generic in nature. It is likely that the content will be cut up/edited to suit the messaging. Please do not send anything that you are not happy to be posted on digital/social media.

STAG Bulletins are available at http://www.seafoodtradeadvisory.com

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STAG Bulletins are a resource for Australian seafood exporters.The Seafood Trade Advisory Group receives funds from the Fisheries Research and Development Corporation. The Fisheries Research and Development Corporation plans, invests in and manages fisheries research and development throughout Australia. It is a statutory authority within the portfolio of the federal Minister for Agriculture, Fisheries and Forestry, jointly funded by the Australian Government and the fishing industry.