The owner of a seafood import-export firm in Beijing interviewed by SeafoodSource is challenging the narrative that business has returned to normal in China.
Didier Boon, who runs Beijing-based East China Seas, which imports Latin American seafood into China and ships product from China to Western markets, calculated his coronavirus-related losses at around USD 750,000 (EUR 688,000).
“For seafood processors and exporters, the market more or less halted on 15 January at the beginning of the Chinese New Year,” he said. “At that time, many factories had not shipped all promised goods, with up to 30 percent in tilapia and 20 percent of shrimp orders outstanding. Needless to say that after Lunar New Year, nothing happened, as factories remained closed for lack of employees and material.”
Most Chinese processors are now back up and running as of last week, Boon said, but only at between 50 and 80 percent capacity. Foodservice “remains limited” in its operations, Boon said, and importers, seafood restaurants, and retailers are now facing a new challenge as countries that supply the bulk of the seafood eaten in China are either on lockdown, like India, or are cutting production, like Vietnam. And exporters are facing a collapse as customers in Western markets turn shipments away.
“The market in Europe first, and now the whole of the Americas, has come to a complete standstill,” Boon said. “Many operators in China and at destination will go bankrupt, as I guess the crisis in Europe will last three months minimum, given much less drastic measures are in place compared to China, where it took two months to control the disease. [And] the crisis just starting in the U.S., where it could last six months given the inconsistencies in the Trump administration’s approach.”
Major economies like Brazil and Mexico also have similarly populist leadership that may be averse to shutting down their economies, Boon said.
Restrictions imposed by Western countries on Chinese imports are creating a financial nightmare for China-based seafood exporters like East China Seas, Boon said.
“We have many containers on the water that customers are asking to take back, saying they will not be able to pay them when it arrives or that borders will be closed with no customs or logistics," Boon said. “I have had more than 50 containers canceled since Monday, eight of them between factory and port to be taken back, 30 of them already packed and ready for export and some with just packaging done but not processed yet.”
Boon said he believes customers will have to participate in the costs, “if they’re not bankrupt by then.”
“It depends on your type of business,” Boon said. “Factories will have to take a hefty charge as well if not bankrupt by then and ourselves if we carry on the business in those conditions,” he said. “India has now come to a sudden stop since yesterday, factories and logistics. More or less the same in Vietnam for lack of orders and logistics.”
The East China Seas boss has made the decision to hold tight until the end of May, retaining all his staff until that time in the hopes that business rebounds enough to stave off ruin.
“If things are the same, we will half-close, keeping essential staff and putting others on leave [with] no pay,” he said. “If there is no end in view, we pack up.”
Not all seafood-related businesses in China face such a gloomy forecast, Boon said. Perhaps best-positioned to survive the coronavirus are Chinese processors that sell into the domestic market, Boon added.
“The situation is much better as huge sales are made through the internet and business is slowly restarting, hoping to fully reopen by 15 April,” Boon said.
Yet the Chinese market is now facing a major dilemma as importers who’ve been able to make some sales online now face a situation where imports from all countries are “extremely difficult for lack of transport and logistics,” Boon explained.
“Chile is more or less stopped as from this week, same in India, and this increases day by day,” he said. “It is especially bad for importers who specialize in high-quality, expensive goods as those are not eaten at home but mainly in restaurants. And now that they could start selling again in China, they cannot get the goods anymore from the locked-down countries.”
