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Shanghai Covid-19 lockdown hitting NZ meat exports

Meat exporters are sending more product to the US to avoid delays at Shanghai Port caused by the city's strict Covid-19 lockdown.

An aerial photo taken on 15 April, 2022 shows a view of Shanghai's Yangshan Port in east China.
Delays at Shanghai Port are having a flow-on effect for other ports in China. Photo: AFP or licensors

Market analysis company AgriHQ said the port is still operating as normal - but transport taking imports and exports to and from the port is being significantly impacted due to onerous permit and testing requirements.

This has caused a big backlog of ships waiting to dock.

Meat Industry Association chief executive Sirma Karapeeva said most New Zealand red meat goes through other ports in China but delays at Shanghai are having knock-on effects.

"Because it is a network if there is disruption at Shanghai Port, which clearly there is, then there is potential that this will spread to other ports because everyone is trying to avoid the same problems."

She said some product was being diverted to the US - but it was hard to say how much.

"I think that has been one of the characteristics of our success story throughout Covid is that companies have been very resilient and agile during the pandemic with very strong customer relationships, which has meant that they were able to reroute containers and reroute shipments quite quickly in order to avoid delays and I guess shutdowns in various countries while still keeping the products flowing.

"So I'm not surprised that some companies have taken that approach."

Karapeeva said some meat exporters will be looking to send more frozen product offshore instead of fresh and chilled meat which is obviously more likely to spoil if it is held up.

Meat exporter ANZCO is doing just that. General manager of sales and marketing Rick Walker said frozen meat makes up the majority of its exports to China but demand for chilled and fresh meat is growing.

"Touch wood, we have not had any issues with fresh and chilled products getting into China but obviously it's a concern so we are looking at pulling back on how much we are sending. We're really having to micromanage the situation."

He said China was ANZCO's major market and with ongoing order commitments the company had not diverted product to other markets.

"We are talking to our customers all the time and we are looking at moving more product to other ports in China. The issue there is that everyone is trying to do the same so it becomes a domino effect.

"But we're confident that we can work our way through this. We're watching it very, very closely, we're constantly looking at our production plans, looking at our supply chain challenges and determining what the best fit is."

Walker said the delays caused by Shanghai's lockdown were making exporting meat more expensive.

"It does add additional cost in terms of just managing the supply chain. Shipments are slower which means we're storing product for longer here to make sure we can get it on containers and get it on the boats to move them out of New Zealand.

"And then there's the value chain as well. Your customers don't pay for that product until they see it arrive and they can clear that product. So that just slows cashflow.

"If it takes a while to clear the backlog at Shanghai Port which we are expecting it will do - it will delay the value chain in terms of money coming back into our bank account."

source: https://www.rnz.co.nz/news/country/465580/shanghai-covid-19-lockdown-hitting-nz-meat-exports