China trade: US, Europe frozen seafood exports under threat as Dalian’s Covid-19 cases halt cold chain food trading

·3-min read

Municipal authorities in the port city of Dalian, in northern Liaoning province, have suspended all cold chain food trading as outbreaks of coronavirus threaten to halt exports of frozen food to the United States and Europe ahead of the Christmas holiday.

Local authorities issued a notice on Monday asking all cold chain food companies, including government-approved, third-party, bonded and individual cold storage food producers and sales firms, to halt operations immediately.

The notice stated that the move was in response to efforts to control and contain outbreaks of coronavirus, and did not specify how long the closures would last.

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The move will increase the pressure on China’s battered food supply chains amid Beijing’s zero-tolerance approach to Covid-19.

The suspension in Dalian is likely to have little influence at home although it is expected to have some impact on [exports] to Europe and the US

Li Xiaohua

The ban also coincides with one of the busiest times of the year for the frozen food trade, as Chinese merchants look to meet Christmas demand from overseas markets, however, local trade is not expected to be hit too much.

“The suspension in Dalian is likely to have little influence at home although it is expected to have some impact on [exports] to Europe and the US,” said Li Xiaohua, vice general manager at Beijing-based industry portal Foodspath, noting that European buyers would be concerned.

“Now that all [Dalian factories] can’t ship goods, this situation may last for 20 days at least, which means Christmas goods hang in the balance.”

Li said most shipments for Christmas orders would normally be completed by November 20, but this could now be jeopardised by the suspensions.

Dalian is China’s northernmost ice-free port and makes up one-third of the country’s total cold-chain goods storage capacity, mostly for exports.

Dalian is a major hub for importing, processing and exporting frozen whitefish such as cod, haddock and pollock, with Europe and the US being the main destinations.

Last week, a government-designated cold store confirmed a Covid-19 infection case, with the number of recorded infections rising to 45 on Monday, prompting the local government to issue the notice of suspension.

As of Wednesday, Dalian had reported over 83 cases in this latest outbreak, with 80 asymptomatic carriers. The National Health Commission has sent a working group to the city, and officials in many other cities like Harbin and Luoyang have asked to closely track and report frozen food flowing from Dalian.

This is not the first time that Dalian has had to close cold-chain operations in the city after local authorities imposed similar measures in January after an up-tick in local Covid-19 cases.

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“Cold-chain suspension is a problem that has affected various food companies since last year,” said a foreign business executive, who requested anonymity given the sensitive nature of the issue.

“Companies have realised that there is little room for discussion with the government on this issue.”

When the pandemic originally hit Wuhan in 2020, there was widespread discussion as to whether cold-chain supply chains had enabled the spread of Covid-19.

There were also several times during the past months when imported frozen foods, such as shrimp, were suspected by some authorities as being a transmission mechanism for Covid-19 into China.

China’s key frozen seafood trading hub suspended all cold-chain businesses this week amid local escalating coronavirus outbreaks, putting exports to Europe and the United States at stake ahead of the peak season of Christmas.

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