Coronavirus halts New Zealand rock lobster exports to China

Wednesday, 29 January 2020

China has curbed travel and stepped up screening to try and curb the spread of the virus which emerged in December.

The coronavirus has halted exports of New Zealand rock lobster to China and the $320 million industry is seeking Government assistance.

Other food exporters are nervously watching developments too.

As well as restricting travel and closing local transport services, Chinese authorities are also discouraging large gatherings traditionally held around Chinese New Year, and many Chinese are also staying home to eat for fear of contracting the virus which has so far killed 106 people globally and left more than 4500 sick.

Rock Lobster Industry Council chief executive Mark Edwards said restaurant closures were occurring 'well outside the epicentre' of the viral outbreak in Wuhan, and exports of live lobsters from New Zealand to China stopped last week as a result of the 'dramatically' reduced demand.

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The New Zealand rock lobster catch is 2750 tonnes annually and up until last week much of it was exported to China.

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This advertisement for an all-you-can-eat crayfish buffet in a Shanghai indicates how popular it is in China. When this photo was taken in 2017, New Zealand rock lobster was selling for up to $1000 a kilo. (File photo)

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While supporting efforts to mitigate public health risks, the timing was of the virus outbreak was unfortunate because it occurred during the peak demand period over the Chinese New Year when prices were higher, he said.

The industry is worth around $320 million annually and directly and indirectly employs 2500 New Zealanders, so there would be very significant economic impacts if solutions could not be found, said Edwards.

Lobsters already harvested were being held in facilities around the country and looking for alternative markets was an option, but the Rock Lobster Industry Council is also talking to the Government and Fisheries New Zealand about ways to reduce the impact of the sudden drop in exports.

Many hotpot restaurants, like this one in Chengdu, are shut because of restrictions on large gatherings and people staying home to avoid the risk of contracting coronavirus. New Zealand beef and lamb exporters are worried about the impact it will have on their sales. (File photo)

'The discussions with government have been constructive, and although the issues are complex, we are hopeful of a good outcome.'

Edwards would not be drawn on whether the council had sought financial assistance, or whether there could be job losses on the horizon.

Meat Industry Association trade and economic manager Sirma Karapeeva said her members were also concerned about the flow on effect of fewer social gatherings and restaurant closures in China as result of the virus outbreak.

'It's really hard to say what the exact impact is at the moment because the situation is evolving quite quickly and it's moving from one region to other regions.'

It also appeared there were constraints on processing products arriving at Chinese ports because people were not going back to work with the extension of the New Year holiday to curb spread of the virus.

This had come at a time when cold storage facilities were quite full, so there was difficulty accommodating new stock, Karapeeva said.

'Most of them [meat exporters] have product on the water or just about to land in China so they are looking at things very closely, and looking at contingency plans they could activate, maybe diverting product to another market in the region.'

Export NZ executive director Catherine Beard said food markets tended to be resilient because whatever happened people needed to eat, but there were real concerns about orders drying up because restaurants had closed.

'It could depend on whether home deliveries are still happening because Chinese are big online shoppers.

'I'm sure the Chinese Government still wants to facilitate the flow of food because the last thing you want with a scared and worried population will be food shortages.'

However, businesses may not be able to claim on their insurance for losses related to the coronavirus.

Insurance Council chief executive Tim Grafton said the exclusions that applied to travellers would also apply to businesses 'which means there would likely be no cover for loss or damage to property, or interruption or interference to the insured business as a result of the coronavirus outbreak.'

It was possible to get 'contingent' business interruption policies covering specific risks, such as a disease outbreak, but Grafton said uptake was low.