EP 529 | AIRED 03/15/2021
COVID-19 China Production Update, Tensions with Russia
March 15th, 2021 --- This week we provide a COVID-19 China Production Update as stalled up Raw Materials continue to choke the Supply Chain limiting the production capacity of the largest Production Plant in China legally authorized to re-open.
--- This week we provide a COVID-19 China Production Update as stalled up Raw Materials continue to choke the Supply Chain limiting the production capacity of the largest Production Plant in China legally authorized to re-open.
It has been just over a year since we aired our first update on the Coronavirus where the main issue post Chinese New Year was that: [Most plants in China have started production again, however access to the production facilities by outsiders are being strictly prohibited] [As for raw materials, because plants do not have enough workers, raw material demand has slowed as they don't need to purchase as much.]
Fast forward to post Chinese New Year 2021, and the main issues now mainly appear to stem from not being able to access raw materials, which are still being held for entry through Chinese ports.
As the supply of raw materials is choking the supply chain, the largest Chinese plant that is legally authorized to re-open is only able to produce certain species right now - and entirely dependent on when they can access more raw materials.
As this plant is one of the few production facilities open, the entire industry is currently after them to ship their products out ASAP.
With the pressure mounting, there has been some relief in piggybacking orders on one another, then distributing upon arrival in North America.
---It appears that as we take a few steps forward, we get pushed 5 steps back as Chinese authorities continue to detect COVID on packaging.
Our director of Asia Operations Chris Liu advised that they are testing every container when it arrives and spraying the boxes with a disinfectant and that every single box getting unloaded into cold storage is getting sprayed and tested.
With these stringent disinfecting procedures, the pace has slowed tremendously - we were advised that only approximately 10 containers are tested per day.
As COVID continues to be detected on packaging, (at the time of reporting) containers are allowed to arrive in China, but Trampers are not.
Pollock from Russia is also prohibited into China - as COVID continues to be detected on packaging.
Our recommendation is to connect with us prior to making your next purchase, as these unchartered waters are extremely challenging to navigate.
To quote our VP of Asia operations "To put it frankly, things are highly unstable with the playing field constantly changing, therefore now more than ever it is crucial to keep your finger on the pulse."
--- However, there are two sides to every story - the second side here being Russia.
Contrary to the claims from Chinese authorities regarding traces of the virus on packaging, Russian virologists deny the possibility of such a long survival in the cold.
A meeting held in February in Vladivostok for everyone involved in catching, processing, storing, and transporting fish, had a general consensus of (and I quote) "the Chinese do what they want and do not give reasonable explanations for their actions."
Russian reports show that fishermen in the Far East do not foresee any quick resolutions to the problems with raw materials delivery to China and are working with the Russian Government for ways to strategically re-develop the industry in order to avoid a repetition of the current situation.
As for discussions related to the more distant future, reports show that the topic was on the development of Russian onshore fish processing.
As acknowledged by the Deputy Prime Minister, "it is necessary to strive not to be completely dependent on the foreign side. It is necessary to develop processing in Russia, supplying products to foreign markets."
Keep following the 3-Minute Market Insight as we continue to report on the heightened tensions between China and Russia.
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