Meat prices to drop in New Zealand
Restrictive measures of transportation adopted by China in its battle against the coronavirus outbreak may result in some price relief for the meat in New Zealand's market.
In 2019, New Zealand sheepmeat exports to China reached $1 billion (up by 40%), while beef shipped to the Asian country was worth $1.1 billion (+113%), according to the figures presented by the Meat Industry Association (MIA). A decline in demand from China may push part of that volumes in the domestic market and add pressure on prices.
MIA chief executive Tim Ritchie said the outbreak and spread of the coronavirus had disrupted the supply chain for red meat in China and the sector continued to assess the impact of the situation. "Despite the issue in China, the underlying global demand for protein remains strong," he commented.
Local media in New Zealand reported that the first signs of oversupply have been seen in beef, with prices easing a bit. On the other hand, meat co-operative Alliance Group representatives are worried about the impact of the lockdown on consumer behavior in China. According to NewsHub magazine, Alliance Group has strong exposure to the Chinese market and is monitoring the situation daily. "With people in home lockdown, that's widespread across not just Wuhan but across the total country. There's a lot to be said for what happens next with the country back off Chinese New Year holiday, but without question there as been a fundamental reset in terms of price and consumption behaviors,", commented Alliance general manager of sales Shane Kingston.
Shipments sent to China have been stockpiling in several ports for almost a week now and the situation is expected to last. Officials from the Water Transportation Bureau, Ministry of Transport have informed that the stacked reefer containers of Tianjin and Shanghai ports have been full of usage, and informed the enterprises not to choose Tianjin and Shanghai as loading or discharging ports. However, ports such as Dalian, Shenzen, Qingdao, Xiamen, Guangzhou or Zhoushan are operating, according to a note issued by Beef to China. Nevertheless, the lockdown of some of the largest cities in China still creates a disruption in the supply chain across the country.
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