There is no doubt the outbreak of the coronavirus disease, now called COVID-19, is having an impact on business activity around the globe.
Just how severe the impact will be is a matter of speculation, and I’ve emailed a couple of industry leaders about what they have heard relative to shipping and trade.
Here at the National Watermelon Association convention in Orlando, Fla., one executive with a global food safety inspection firm said some of their employees in certain areas of China are staying at home as a precautionary measure.
In the fresh produce world, Richard Owen, vice president of global membership and engagement for the Produce Marketing Association, said he has heard of backups of U.S. products going to China.
From Richard Owen:
“There are multiple problems, but the biggest seems to be not enough workers at the ports and along the supply chain in China. Many of the businesses that would unload or process the shipments have been shuttered or the staffs cut way back because of government mandates for Chinese citizens to stay home. Plus, fewer inspectors to process their requirements for products entering China.”
“In addition, there are fewer ships leaving China because many factories are “shuttered or reduced production. And employees have been asked to stay home from the Chinese New Year. Thus, fewer containers and ships available in the network globally to return to China with products. Yesterday, I read in the Wall Street Journal that Sea-Intelligence said in a report this week that more than 350,000 containers have been removed from global trade since the outbreak of the virus led China to impose large travel restrictions at the end of the country’s Lunar New Year holiday break.
Doesn’t seem like there will be a quick turnaround to the delays, even if the coronavirus cases started declining tomorrow.”
Mark Powers, president of the Northwest Horticultural Council, said this when I asked him about the China virus situation in an e-mail:
“Apple shipments to China are down 21 percent from the same time last year and I suspect will continue to decline until the virus situation improves. The retaliatory tariffs remain and they will also continue to reduce sales until good news of some kind arrives..”
TK: The coronavirus is not any kind of good news for anyone, but we can hope its spread will remain limited. But the delays in the movement of shipping containers could have unforeseen ripple effects on other export regions.
Finally, check out a few charts of U.S. apple, citrus and grape export volume for the past few years, and illustrate the weakness of 2019 exports.