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COVID-19 disrupts seafood markets and production

worker with fish

COVID-19 has caused immediate and devastating consequences in many countries. Border closures, social distancing, lockdowns and other measures taken to stop the spread have serious consequences for fish and seafood trade, especially products destined for the foodservice industry. Future consequences will be far-reaching.

COVID-19 has caused global economic shifts which have slowed or stopped normal outlets for certain products. The food service sector in the EU, US, China and many other countries, has almost completely shut down. A large amount of fish and seafood is consumed in this sector. The retail sector saw a slight increase in sales. This helps countries like Vietnam, who send a lot of product to the EU retail market. The increase is not expected to last, though.

Producing countries have also been affected by COVID-19. Farm and factory work has stopped due to government lockdown measures and staff shortages. Stock is building up in cold stores and farms are putting operations on hold. Countries like Indonesia, which like Vietnam is not under lockdown, are still producing products. Yet, they are struggling to supply the increased demand coming from China due to transportation disruptions; this means adding more stock to already full cold stores.

Problems for businesses

One big and immediate problem for many businesses is having the cash to continue operations without income from produced products. This is particularly the case for SMEs. Most European importers are also facing financial challenges and insecurity at the moment. They are ordering conservatively and cancelling or postponing orders when possible.

Once markets reopen, the fish and seafood that has built up could suddenly come to market, which could make prices crash. Farmers may have to sell below production prices, and exporters may have stock that is more expensive than market value. Beyond this, the longer the lockdown goes on, the harder it will be for companies to fund starting operations again.

Supporting global food security

Governments are working towards simplifying entry procedures for food products. They are, for example, allowing digital copies of certificates, where they normally would not. Organisations like the World Health Organization and the European Union support and work towards continuing the trade of food and essentials. They hope to help businesses survive the crisis and support global food security.

There is a lot of uncertainty about the future of the market in the short and long term. One of the best things that companies can do is discuss with their suppliers and buyers, and work together for mutual survival - we all rely on each other.

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This news article was written for CBI by Seafood Trade Intelligence Portal.

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