CHICAGO (Reuters) - Coronavirus is disrupting meat shipments to China as the country faces a shortage due to an outbreak of a fatal pig disease, Tyson Foods Inc TSN.N and U.S. agricultural groups said on Thursday.
An outbreak of African swine fever, which infects only pigs, has decimated China’s herd, pushing Chinese pork prices to record highs and increasing the need for meat imports.
However, coronavirus - which has killed 563 people so far - is keeping consumers and workers at home in China, delaying purchases at stores and restaurants and slowing the unloading of products at ports.
The disruption exasperates Beijing's efforts to ensure adequate meat supplies and the plans of global companies like Tyson and JBS SA JBSS3.SA to profit from the shortage. The dual disease outbreaks also highlight the problems facing import-dependant China in its efforts to feed its population.
“There’s been disruptions at the ports,” Tyson Chief Executive Noel White said on a call with analysts. “That has skewed shipments, receivals.”
China has increased meat imports from the United States, Europe and Brazil as African swine fever has killed up to half its pigs since August 2018.
Beijing pledged to increase purchases of U.S. farm goods in an initial trade deal last month, raising traders’ expectations for more pork shipments. China also eased restrictions on U.S. beef imports and in November lifted a ban on U.S. poultry meat shipments.
But coronavirus has clouded the outlook for Chinese demand, White said, as cities have been quarantined. He said Tyson is still shipping meat to China and has orders on its books.
“Once we get past the coronavirus incident, whenever that might be, I do think there is going to be very strong demand,” he said.
Meat is shipped to China in refrigerated containers that must be plugged into electrical outlets once they are offloaded to keep products cold.
Importing companies normally receive containers as they arrive, freeing up space for others. But several Chinese ports are at capacity on space for refrigerated containers and outlets because few receivers are picking them up, said Peter Friedmann, executive director of the Agriculture Transportation Coalition. Shanghai and Xingang have reported 100% utilization of available plugs, he said.
Meat shippers are also scrambling, selling to other countries or shipping to other Chinese ports, Friedmann said.
“Things are really getting bad over there,” USA Poultry & Egg Export Council President Jim Sumner said.
Reporting by Tom Polansek and Karl Plume in Chicago; Editing by Dan Grebler
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