BULLETIN

13th March 2020

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.

China situation (Australian Embassy Beijing)

Source: DAWE, 11th March 2020

• The daily virus infection and mortality number is reducing in China and the Chinese government is encouraging businesses to return to work.
• Most major production industries appear to be heeding the request, although it estimated they are only working at about 1/3 capacity.
• Still around 70% of restaurants and food outlets remain closed
• People are still relying heavily on purchases via e-commerce and home delivery service, although delivery times have extended due to demand, limited drivers and restricted areas.
• Ports are clearing well at about 85% - 90%, with the exception of reefer containers as most Cold Stores remain full.
• Chinese Government have re-implemented the “Buy China” program stressing consumers need to support the country, particularly in the area of food and agriculture products.

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.

Here are some of the impacts that have been reported to the STAG:

• Seafood appears to be one of the most effected industries, within the primary food production sector.
• There is significant and ongoing market volatility globally.  The situation is changing daily.
• 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.
• We note that most fisheries authorities have taken measures to assist industry (e.g. rollover of quota or changes to quota years).
• Demand and orders from alternate markets to China remains limited and at significantly reduced prices.
• 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.
• Demand for cook at home and ready-made meals is stable or slightly increased.
• Freight availability and cost is an emerging issue. 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%.
• 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, 9th 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 prosper, 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 much appreciated.
• Austrade may develop this content into formats that are easy to consumer, interact with and go viral.  

Action: Industry, government and researchers to submit links to 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.

Operational challenges – advice to government

Source: DAWE, 12th March 2020

The Department of Agriculture Water and the Environment has established a new email for businesses to report operational challenges being experienced due to the Coronavirus situation.  They would like advice on business impacts such as the following (below is not an exhaustive list):

• Impacts on forward orders (e.g. cancellations)
• Disruptions to supply of inputs (e.g. packaging)
• Impacts (actual or forecasted) on exports to China and other markets (e.g. freight space availability, delays and additional costs)
• Impacts (actual or forecasted) of restrictions of movement of people (e.g. tourism impacts, internal company impacts such as staffing, workforce, conferences, key meetings etc.

The information will be used by the Department to feed into their analysis of the COVID-19 on Australian industry and inform whole-of-government responses.

Changes to tradeshows and conferences

Source: Various, March 2020

The following events have been cancelled or postponed:

• 2020 SENA (Boston) – new dates yet to be announced
• Seafood Expo Global (Brussels) – new dates yet to be announced
• World Aquaculture 2020 (Singapore) – now tentatively scheduled for December 2020
• Food Hotel Asia 2020 (Singapore) – rescheduled for 2-5 March 2021

Website for information about seafood safety and Covid19

Source: Seafood Headlines, accessed 13 March 2020

We have just come across this Seafood Safety and Covid19 website which 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.

We hope you find it useful.

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

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.