EP 570 | AIRED 01/03/2022
2022 China Update: Dalian, Qingdao, Yantai, CNY, Lent, COVID-19
Jan 3rd, 2022 --- Happy New Year! Welcome back to what will be another exciting year of weekly 3-Minute Market Insight videos.
This week we bring you up to speed on China as we jump right back into the swing of things after what we hope was a happy holiday and new years for everyone.
--- Here are a few reminders before we dive into our China update.
Lent this year will run from March 2nd to April 14th so this is just a reminder to get your Lent program going.
The second reminder is that Chinese New Year is on February 1st this year so plant closures are slated for around the 23rd of January.
Back in December we reported that plants in Dalian remained closed due to a COVID-19 outbreak in November and with the anticipation that Dalian would not reopen before Chinese New Year, production shifted to Qingdao and Yantai.
Currently, plants in Dalian continue to remain closed while Chinese government officials visit each plant to reassess mandatory revisions to their COVID procedures.
Plant managers in Dalian have already started letting workers leave for Chinese Year break and while some workers are going home, others are heading to Qingdao and Yantai to look for work.
With orders backlogged and plants in Qingdao all running full speed, it’s being said that they will keep workers working until 5 days before the Chinese New Year break instead of letting them go 10/15 days before.
There is currently no firm estimation as to when Dalian will reopen and although (at the time of reporting) there have been zero new confirmed cases of COVID-19 in Dalian, you can bet government officials will be cautious to reopen factories with the spread of the new omicron variant.
With that said, the outlook for Dalian after Chinese Year New remains unpredictable and as such, plants are anticipating more workers to relocate to Qingdao after Chinese New Year.
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For raw materials, not much has changed since last month as supply in China is still short and Russia continues to work directly with processors in the EU.
One main difference from previous years is that raw materials pricing would have typically been set by December for many of the main categories, however nobody really knows what is going to happen after Chinese New Year this year.
For freight, although costs are still high, there is speculation that it will be coming down in prices.
Our recommendation this week is to ensure you are preparing your Lent Program now and if you are in need of value added seafood options, Tradex Foods has you covered with seafood products already in North America, in one of many hubs from the West to East Coast - not to mention we have many domestic production opportunities available.
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