Frustration is mounting among seafood distributors in China, with the country’s aggressive measures to limit spread of the COVID-19 delta variant causing increasingly dire economic repercussions.
The country’s customs and health authorities have recently widened their efforts beyond their earlier concentration on seafood packaging, entrapping more seafood in congestion at ports, which have become a focus of government efforts to limit entrance of the delta variant into China.
“Port congestion is getting more serious, not only for seafood, but also for meat and other chilled or frozen containers,” according to a Dalian-based seafood producer and distributor who asked to remain anonymous. Congestion, he told SeafoodSource, “will influence price, both cost level and supply volume side.”
“Especially for high-value seafood, the price increased dramatically, since the foodservice demand [has] recovered quite well,” he said.
COVID-19 infections among port workers in Shenzhen in May to June as well as more recent outbreaks in Ningbo as well as Nanjing, Yangzhou, and Zhangjiajie have led to closures of port facilities and further delays to processing of freight. Additional cases at Shanghai Pudong International Airport’s cargo area added to the chaos for importers and shippers.
“Yes, there has been a great deal of port congestion across China, but especially for Dalian,” Shanghai-based trading firm SMH International CEO Robin Wang said. “Having gone from a lockdown to opening up, and discovering more cases, they have been the strictest in terms of port oversight. According to reports, Qingdao has been a little better. On average, products are taking about a month to clear given all the relevant procedures – inspections, sanitation, document verification, testing, etcetera. Obviously, there have been considerable delays with things backing up.”
Demand for all seafood remains strong, but “it is taking much longer for product to come in, affecting overall supplies,” Wang said.
“Given increases in export prices and lower supply, prices have started to creep up. Heading into the second half of the year, demand for seafood will likely continue, and possibly grow driven by National Day Holiday, New Year’s, and Spring Festival. So, it is possible that prices will trend up,” Wang said. “It will be important to see how the following months play out in terms of COVID management. Should cases ease, hopefully more product can come in. It not, this could further drive prices.”
Port congestion in Shenzhen has eased and Ningbo Meishan port will reopen soon, according to Fan Xubing, head of Beijing-based SeaBridge marketing consultancy. However, Fan said the delta variant is “giving frozen seafood imports a lot of difficulties and restrictions” and he predicted long-term disruption to seafood freight.
“These accidents [are] all related to international airplane, cargo planes, or cargo vessels, so our government is very serious about the imported passengers and cargos now. I think if this kind of delta virus importation could not be completely controlled, China’s government will not release the restrictions on imported food, including seafood,” he told SeafoodSource. “This situation might last until end of 2021, so we should be prepared for long-term difficulty.”
Despite worries over Chinese consumers associating imported seafood with COVID-19, demand for certain species appears unaffected, but prices are higher, according to Lily Yuan at YM Trading, an importer focused on the southern Chinese market.
“Our imports of squid and shrimp have increased 20 percent in volume terms in the first half of the year, but prices are up,” Yuan told SeafoodSource. “Freight costs are higher, so vannemei, squid, and turbot costs are higher. The domestic demand is up, thus the Chinese customers will have to absorb the costs.”
Chinese independent seafood importer and distributor Michael Peng said the shifts caused by the COVID-19 crisis in China are putting a squeeze upon importers.
“The margins on imported seafood are down but the risk is rising,” Peng said. “If your goods test positive, it’s you, the importer, who takes the hit.”
Exporters are adapting new measures with Chinese clients, he told SeafoodSource.
“Many of them are asking for cash up front, to protect themselves,” he said.
Peng said he sees long-term risk and uncertainty for importers like him due to the pandemic.
“There is no solution in sight, we have to bear with it,” Peng said. “I don’t’ see an end at all.”
Photo courtesy of Victor Fraile Rodriguez/Shutterstock
