China hiccup export concern

Export economy stuck in the queue as coronavirus lockdown slow to re-open

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Beef exports out of Northern Co-operative Meat Company have been stuck on Chinese wharves during the coronavirus crisis, leading to reduced throughput at the Casino abattoir.

Beef exports out of Northern Co-operative Meat Company have been stuck on Chinese wharves during the coronavirus crisis, leading to reduced throughput at the Casino abattoir.

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Wharves start to re-open in China after coronavirus lockdown, but delays getting back to full manufacturing could continue for weeks.

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When China sneezes the whole world catches the flu, such is the far reaching impact of its vacuum-like supply chain.

With the recent coronavirus alert far from finished, Australian exporters who sell to the Middle Kingdom are nervously waiting further developments - while others are profiting from the experience.

Northern Co-operative Meat Company at Casino has cut production back to four and half days a week while frozen beef sits untouched on Chinese wharves, although CEO Simon Stahl said he expects a gradual resumption of flow now that Shanghai ports have re-opened, following the extended Lunar New Year holiday.

Meanwhile, industry sources in China are saying there is a strong likelihood that authorities in some key provinces may extend the Lunar New Year holiday until next Monday. This means doors to companies and factories will remain closed, reported India's The Economic Times.

More than half the provincial governments have already extended the closure, the report stated.

"We live in a global economy and no one is immune from anything," said NCMC's Mr Stahl. "Businesses across the world can expect to have interruptions.

"The beautiful thing for Australian beef production is that we have some risk mitigation through access to other markets like Japan, Korea and the US. Indonesia as a market is looking even more promising and it will be interesting to see what happens with Brexit."

Chairman of the dairy co-operative Norco, Greg McNamara, said fresh milk exports to China had been particularly hit by the virus shutdown, with supplies unable to reach consumers due to flying restrictions.

Travel bans were preventing delegations of Chinese from visiting Australia to conduct business and vice versa.

"The consequences of this virus are pretty serious," Mr McNamara said. "The restrictions to comings and goings will have a ripple effect. It will have an impact on the economy."

For Toowoomba Wellcamp Airport director John Wagner, the clampdown on passenger transport has proven a boon to freight flights, with movement at the purpose-built facility up by 40 per cent during the coronavirus crisis.

Mr Wagner said there were no hiccups regarding turn around or flight restrictions, while National Australia Bank reported air freight faced logistical challenges.

Wool production in China has felt the pinch, with a flow-on for Australian markets.

Michell Wool CEO Steven Read said work might not resume fully in their Shanghai mill until early March, depending on how quickly government allows people back to work.

"It seems banks have staff working from home where possible so perhaps payments for wool bought by Chinese mills in recent weeks may resume - but if they are unable to ship processed wool out of the country cash will be bound up ultimately," he said.

"Impact on consumer sales of wool products in China are not known - but expected to be material."

For outdoor superfine wool brand, Bluey Merino, the Chinese lockdown is playing to its favour, with US outdoor brands now more interested in Australian woolen garments that are manufactured in Europe.

"We found this increased interest after the Trump tax on Chinese goods and again now that there are health issues in the back of consumers' minds," said Bluey Merino founder Andrew Ross.

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