China’s COVID-19-related restrictions are impacting trade and logistics across Asia.
China’s customs authorities have ramped up their inspection and control regime at the country’s seaports and airports, aiming to prevent the delta variant from coming into the country via foreign trade. But the repercussions of that policy are hitting the seafood industry hard, with supply restrictions affecting trade and logistics across the Association of Southeast Asian Nations (ASEAN) region, in Hong Kong, and beyond.
Entering China has been markedly more difficult, said Desmond Chow, the CEO of Singapore Crawfish Pte., which ships crayfish from Southeast Asia to China.
“The difficulty in getting certain goods or livestock has definitely caused prices of products to surge. Most developing countries especially Southeast Asia you need to have proper ‘connections’ to ensure smooth delivery of your goods,” he told SeafoodSource. “Shall you go through the proper channels, you can almost always expect delays.”
The pan-continental problems have forced Chow to raise prices “slightly” to cover increased “logistical instability and uncertainty.”
“The key problem is still the [COVID] restrictions,” Chis Hanselman, the CEO of Pacific Rich Resources – which imports high-end seafood into Hong Kong and mainland China – said. “The lead time for production has been elongated. I can no longer rely on JIT [just-in-time] system over six weeks. We are now working three to four months out, which is hard. Factories are operating at lower capacity, so production times are longer. You still have to pay deposits on production, so cash flow is tight as you work around advanced pre-payments and slow accounts receivables.”
Business is still steady enough not to threaten the existence of his business, but Hanselman said he’s had to be nimble and keep a close eye on the market.
“Retail is good, online oscillates from good to bad, airline is awful of course. Foodservice is picking up, but [sales to] hotels are still poor. So business is still hard work,” he said.
Complicating matters further for Hanselman is the ongoing COVID outbreak in Vietnam, which has interrupted his company’s seafood supply.
“My factories are working at less than 40 percent capacity. And there is real stress on the ports. I need a shipment now, [but] the first time they can ship is November,” he said. “It’s a nightmare.”
But for some European exporters, including Irish oyster exporter Bells Isle Seafood, supplying China has become untenable, and they are reconsidering diverting supply.
“For me, it’s very difficult with consignments delayed in recent months, [with] cancellations of [flights] regularly, alteration of timetables, etcetera,” said Moore, the director of Belles Isle, which has built up a significant market in China. “Is this going to be the way [it continues] in the next year or two? If this is the case, the theory of spreading risk of selling [more] into Europe seems a wise move. Growing huge amounts of grade 0 and 1 oysters for the Far East will have to be reviewed downward until this COVID nightmare passes.”
Photo courtesy of NGCHIYUI/Shutterstock
