EP 565 | AIRED 11/22/2021
China Update: Covid-Zero Strategy puts Chinese New Year Production in Jeopardy
November 22nd, 2021 --- This week we provide a China Update as the country’s “Covid Zero” strategy implemented to combat it’s largest Delta variant outbreak, puts Chinese New Year production in jeopardy.
--- As other nations have pivoted to living with the virus, China has doubled down its efforts on executing their Covid Zero strategy of eradicating the virus on its soil - which includes defenses such as lockdowns and forced quarantines, mass testing (including door-to-door testing), rigorous contact tracing, and travel restrictions.
Alongside closures of schools and other public venues, all fish plants in Dalian are reportedly shut down as well.
One large processing plant (that will remain unnamed), recently had multiple workers test positive for COVID-19 and it’s being reported that half of the workers have been quarantined.
For processing plants, the focus has now shifted from securing raw materials to essentially surviving the current crisis.
Current reports are that all raw materials that are presently in port cannot be moved.
Some raw materials that were on their way to Dalian have been re-routed to either Qingdao or Yantai; however, raw materials that were not able to be re-routed, will be met with heavy demurrage and port charges.
With the shutdowns in Dalian, plants in Qingdao and Yantai have been receiving a flood of order requests from Europe and North America, however plants in Qingdao and Yantai were already fully committed a few months ago due to raw materials and worker shortages.
As Chinese New Year falls on February 1st 2022, there is a very good chance Dalian will not be able to resume production before Chinese New Year closures - as such buyers have already started ordering more products from Qingdao and Yantai.CHECK OUT OUR #SeaTheGood CAMPAIGN
Which Seeks To Spotlight Something “Good” Happening In The Seafood World As Opposed To Unfortunate News.
For current raw materials pricing, please take a look at this China Raw Material Matrix.
Our recommendation is to buy what you can get your hands on (as we head into Holiday buying season), and to buy through quality suppliers such as Tradex Foods that can produce inspection reports for domestic and overseas production.
With the current state of the supply chain, there is bound to be deceptive practices at play.
Secondly, prepare your customers (and yourself) on buying local as costs (and/or inflation) continue to surge.
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