An energy crunch in China appears to have hit the seafood industry, as a major Fujian-based firm has been forced to write off a large inventory due to power outages over the recent National Day holiday.
Zhangzhou Jintian Food Co, a non-wholly owned subsidiary of Hong Kong-listed CBK Holdings Limited (also known in Mandarin as Guomao Holdings), had to write off CNY 18 million (USD 2.7 million, USD 2.3 million) worth of seafood stock after a power outage at the cold storage facilities where it warehouses its processed seafood products.
The firm announced via CBK Holdings that “serious stock deterioration” in frozen aquatic products had disrupted output at its plant. The firm processes and sells surimi and other aquatic products.
In response to the outage, CBK said it will “reassess the adequacy of the electric-power system of Jintian Food Co in Zhangzhou.”
China has been going through an energy crunch in recent weeks caused by a range of factors, partially as a result of local officials rushing to meet clean air and emission targets set by China’s central government. China’s state sets electricity prices under the true price of electricity, effectively offering a subsidy to commercial enterprises, which has been blamed as a disincentive to power firms to increase supply.
Last week, Rabobank China Agriculture Analyst Chenjun Pan warned that electricity shortages will impact China’s food production and distribution if the power-hungry cold chain couldn’t be kept functioning.
Photo courtesy of chuyuss/Shutterstock
