SEVERE COVID lockdowns in Shanghai and Beijing, along with several other large Chinese population centres, have pushed China’s April meat imports one-third lower, year-on-year.
China’s General Administration of Customs (GAC) reported meat imports (principally beef, chicken, pork and lamb) for April at 592,000 tonnes, down 35.7 percent from this time last year.
The Chinese government is struggling to contain the country’s worst COVID outbreak in two years, with severe lockdowns imposed last month on citizens in Shanghai, and later, Beijing, covering close to 100 million million people.
End-user demand has suffered from closure of restaurants and hotels across the country, in an attempt to contain the COVID outbreak.
Imports have also been impacted by strained logistics caused by an extended COVID lockdown in the Port of Shanghai, the country’s key arrival port for beef, and Beijing. Long delays are being reported in loading and unloading of container vessels in both ports, and some shipments are being diverted through other Chinese ports.
A surge in domestic pork production may have also curbed appetite for meat imports Channelnews Asia reported.
China’s meat imports for the first four months of the year are down 36pc on a year before, at 2.26 million tonnes, according to GAC data.
Australia’s beef trade with China last month reached 11,730t, down 13pc on the month before.
Traders rely on Shanghai’s ideal location for distributing product around the country, but since rise in COVID cases forced a lockdown in the city at the end of March, moving chilled or frozen products around the country has become a logistics headache.
In a recent update on world shipping outlook, logistics support company Container xChange said conditions in China were like a traffic jam.
“Some people have now stepped on the brakes really heavily and the problem is that this will lead to a significant back-up in demand for freight services, which will essentially be unleashed once the factories re-open,” it said.
“And when the demand is back, the carriers will again not have enough equipment on the ground because not enough equipment went into China during the Port lockdowns and not enough vessels are available, so that will push up prices again,” it said.
“This will continue to create volatility in the market and the congestion situation on the trans-Pacific routes will also not significantly improve, because it’s a start-stop situation. It will just come back worse than it was, because the way to solve a traffic jam is not by stopping something violently and then hitting the accelerator again – it’s about making sure that the traffic flows at a constant speed.”
The impact of COVID lockdowns on key markets would have wider reaching impacts leading to equipment scarcity in China, rising freight rates and worsening of the traffic jam on transpacific trade, Container xChange said.
Rising oil prices
Rising oil prices would have a limited impact on container freight trade in the short run, the company said.
“Generally, high oil prices hit hard when the freight rates are very low. Currently, when the freight rates are astronomically high for the past two years (for instance, $10,000 for a 40 ft high cube from China to the US) the impact of a fuel price hike will not have such a large impact in the short term. What remains to be seen in future is how the Ukraine war pans out, and how the supply chain builds resilience, longer term.”