The rapidly spreading coronavirus, with an origin tracked to a seafood market in Wuhan, China, has the potential to have a drastic impact on China’s seafood industry.
Both exporters to China as well as importers of processed product from Chinese suppliers are worried about the impact of the coronavirus on their sales, according to Dan Harris, an attorney at the Harris Bricken law firm, with offices in the U.S. and China. The firm represents U.S. seafood importers and Chinese exporters.
With increased uncertainty about when shuttered Chinese factories will recommence work, Harris is predicting major trouble for companies both shipping to and buying from China as companies back out of orders while claiming ‘force majeure’ in deciding not to pay or deliver.
“Coronavirus likely will constitute a force majeure [a clause included in contracts to remove liability for natural and unavoidable catastrophes] for your Chinese counter-parties and this will mean they can breach their contracts with you without much if any legal repercussion,” Harris told SeafoodSource. “This also likely means some Chinese companies that are not yet truly impacted by the coronavirus will seek to use the virus as a basis for terminating or breaching or revising their contract with you.”
Uncertainty and fears of wider geographical impact are worries for Des Moore, managing director at Belle Isle Seafoods, which ships most of its output to China.
“All sales appear suspended until 8 February. We do not know what will happen next,” Moore said. “Needless to say, this reverberates all around the marketplace. A lot of oyster farmers are wondering what to do next. Mainland Europe markets could follow suit very easily if pockets of coronavirus arise in Germany, France, etcetera.”
The suspension of many international flights into China and the closure of land crossings between China and Hong Kong is effectively shutting down the importing of high-grade seafood, with a resulting fall in price for producers both within China and abroad. Seafood restaurants have also been shut down across China.
The coronavirus crisis looks set to accelerate China’s transition away from wet markets and toward more hygienic supermarket outlets like the Hema chain, which is backed by the Alibaba group. The State Administration of Market Regulation, alongside the Agriculture Ministry, issued a statement announcing a nationwide ban on the trade of wild animals in China. But the ban may not have its desired effect, given a similar ban was put in place in the emergence of the SARS epidemic in 2003 in southern China.
The practices of the owner of the seafood market in Wuhan at the center of the crisis have come under intense scrutiny since the outbreak, with allegations of corruption appearing in Chinese media and on social media.
Photos have emerged on Chinese social media from the Huanan market showing live wild deer in cages, which were sold for CNY 6,000 (USD 900, EUR 787) each, and dirty plastic boxes of intestines from deer, civets, porcupines, and leopard cats. The central location of the market – next to a major railway station and opposite a district police headquarters – suggests local authorities either ignored the illicit activity at the market or were complicit in the lawbreaking.
It appears the Huanan Seafood Wholesale Market was part of a real estate company of the same name and many users on Weibo microblogging platform suggested that the owner had connections to local officials who protected his business. The market’s widespread violations of the ban on trading in wildlife provide evidence that China’s food safety regime remains unenforced despite recent major reform efforts.
Photo courtesy of Popel_video/Shutterstock
