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Spain’s fresh produce sector steps up to the plate

Spain’s fresh produce sector steps up to the plate

The Spanish fruit and vegetable industry is playing a leading role in attenuating the impact of the Coronavirus outbreak. Across Europe, demand has been rocketing for certain products, and, according to Paco Borrás, chairman of the Export Committee at Freshfel and former commercial director of Anecoop, fruit and vegetable sales in Spain are considerably higher than normal – probably due to their renowned health benefits. To meet this demand, in the past two weeks, suppliers have been speeding up processes to be able to deliver up to 30% higher volumes; even so, this has still not been sufficient to last the entire day. Southern Spain’s growing regions have so far not been as affected as other parts of the country by the virus and have therefore been able to maintain a steady flow of supplies to the domestic market.

However, the restrictions on the movement of people are likely to jeopardise this state of affairs. While field and packhouse workers are still allowed to go to work, there are likely to be shortfalls in the workforce as family members fall sick or parents are required to stay home to look after children. Moreover, if the conditions worsen, packhouse employees may be reluctant to expose themselves to potentially becoming infected from colleagues.

Companies say that they are taking all the necessary precautions to minimise the risk of infection. These measures will involve greater costs in the operations. Also, exports to Asia have encountered logistical problems as have shipments to other parts of Europe, with delays at the borders of Italy, Austria, the Czech Republic and Slovakia. This means fewer trucks available for deliveries within Spain. Combined with the likely drop-off in demand for fruits and vegetables in the next weeks, companies are going to have to bear a great deal of uncertainty and financial cost. 

Spain’s National Federation of Transport Associations (Fenadismer) calls for exporters to cover the direct and indirect costs of the empty return. The additional expenses just for of diesel for a 2,000 km trip can mean €1,000 more per truck. Spain has 130,000 vehicles dedicated to international transport, making a combined average of 150,000 weekly trips.

Borrás notes that the key role being played by the sector in this critical moment will no doubt be remembered society at large.

 

 

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Online retail sales jump 20% due to impact of coronavirus

Online retail sales jump 20% due to impact of coronavirus

The Coronavirus is changing the way people shop, with the restrictions on movement and health fears driving an increase in spending online. Analytics platform Contentsquare published a report based on its analyses of 1.8 billion user sessions and 50 million transactions on 1,400 websites worldwide between the weeks of February 16 and 23. The study compared the conversion rate, the number of transactions, the number of visits, the length of sessions in order to analyse changes in consumer behaviour online during the two-week period.

The results showed a sharp increase in conversions for household and grocery items, as well as a major rise in hours spent on the web searching for first necessity products. Online purchases from large retailers increased by nearly 20% and consumers spent 25.7% more hours searching online, up 44%. At the same time fears over shortages drove sales in physical stores up 16%, with an 8.1% increase in the industry’s average conversion rate. 

Over the coming weeks, it is likely that online sales will continue to rise if lockdowns spread worldwide.

Press Release: https://contentsquare.com/

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Reefer shortage remains despite slight recovery in China

Reefer shortage remains despite slight recovery in China

 

Markets in some areas of the Far East appear to be slowly returning to work, after a major slowdown in the face of the Coronavirus outbreak. Although consumption is starting to recover somewhat, this is still far from being the case across the region, according to Juri Falandt, owner of Dutch company, Milestone. Speaking to FreshPlaza, Falandt said, “It is expected to take at least two to three more weeks before production is at full strength again. However, for now, there is still a huge shortage of truckers. These are needed to transport goods to and from the inland and harbour. Shipping companies have already cancelled many trips employing void sailings. At the moment, it is still reasonably easy to book containers. But, this will become more difficult in the coming weeks. Then, production will reach normal levels. Everyone is going to try and catch up. There will be renewed pressure on rates and space in the coming weeks.”

There are currently an estimated 200,000 reefers stranded in Chinese ports and surrounding countries, according to Seatrade. This represents about 13% of the total number of worldwide reefer containers. There are reports of container ships having to dump their loads or return without unloading because there is nowhere to offload. Seatrade reports that due to the shortage, some companies are currently only able to access 25% of the reefers they require for their goods. “The first tangible structural change is still, at least, eight weeks away. Also, the large container shipping companies have very serious cashflow problems. In an attractive market, they might start charging higher tariffs for their reefers. So, not only will these shortages have long-term repercussions on the market, we can certainly expect these higher prices to continue.”

 

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Coronavirus fears trigger panic stockpiling across world

Coronavirus fears trigger panic stockpiling across world

 

Panic induced by the coronavirus is leading to consumers bulk buying food, health care and other essential products as fears rise over potential supply disruptions. Retailers across the world are reporting crowded supermarkets and emptying shelves of items such as hand sanitiser and dry groceries like rice, pasta and canned foods. Consumer market researcher Nielsen that “pandemic pantries” are now spreading across the world. 

The emergency buying up of essential goods is also boosting spending on non-essentials like supplements, fruit snacks and first aid kits.

According to Nielsen, “In Vietnam, 45% of consumers polled said they’ve increased what they’re stocking at home, and 25% are buying more items online. Similarly, in Taiwan, instant noodles have been plucked from shelves and are now difficult to find in stores.

Analyst Kelly Bania of BMO Capital Markets describes the current situation and the direction it might take: “We see risk for a scenario in which COVID-19 virus significantly alters the food consumption patterns of Americans on a short-term and possibly uncertain timeframe. We also see increasing risk from the emotional impact on consumer confidence/spending patterns, given near correction status on the market. Going forward, it will be increasingly difficult for investors and companies alike to discern the underlying cause of these potential shifts and or areas of weakness.”

It is likely that there will be a shift from eating out to eating at home, which could further drive an increase in online food and grocery spending.

 

Nielsen-Coronavirus Pandemic Pantry Chart

 

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Chileans stand by Chinese partners during coronavirus outbreak

© Alexandra Sautois

 

Chilean Fruit Exports Association (Asoex) has offered support to China by offering to donate fresh fruits to the medical staff working to treat people affected by coronavirus. Containers filled with fresh Chilean produce sent to different ports across China had been held back due to the outbreak. With Chinese consumers turning to online markets to buy fresh produce, overall consumption has reduced. Shipping companies have been working to keep the containers in the market so as to increase availability of refrigerated storage.

In a statement issued by the organisation, Asoex president, Ronald Bown Fernandez, said: “It is complex, it requires constant monitoring as to how it evolves. We are relying on Chinese authorities to contain the virus, with the aim of returning to normalcy in the shortest period of time possible.” It’s unknown how long the current situation in China will last, with Asoex announcing it will work with the government to minimise the negative effectives by implementing a “specific campaign to promote the healthy attributes of fruit consumption”.

Around 265,000 tons of Chilean produce have been exported so far this season, with the main products being cherries, blueberries, table grapes, avocados, nectarines, plums, apples, and kiwifruit. This figure is up 27.7% from the same period last year.

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Global shipping stricken by coronavirus outbreak

Global shipping stricken by coronavirus outbreak, © Anthony Kwan, Getty Images

© Anthony Kwan, Getty Images

 

The coronavirus outbreak has taken a heavy toll on China’s shipping industry as a result of the lower output and trade. A report published by Danish maritime research group Sea-Intelligence highlighted the greatly reduced cargo flows between China and the rest of the world, with 50 sailings cancelled since January and 30 last week alone across the Pacific and to Europe. The Wall Street Journal reports that five European and Asian container ship operators are preparing profit warnings for the first half or the full year. This news comes as a great disappointment, especially as it had been hoped that the improved trading relationship between the US and China would result in an upsurge in business. The WSJ reports that at least one container ship with a capacity to carry over 20,000 containers left Shanghai for Northern Europe with only 2,000 full containers. “It will pick up more at ports on its way, but loading data show it will reach Europe around 35% full,” this broker said. “That’s unprecedented, and a lot of money is being lost because it doesn’t even cover the fuel cost.”

According to the report published by Sea-Intelligence, over 350,000 containers have been removed from global trade since the Chinese New Year. These woes are estimated to be costing the shipping sector around US$350 million a week.

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Chilean fruit exports to China decimated

Even though fruit is a significant snack globally, and even vegetables are popular in the Asia-Pacific region (57%), cheese is the most eaten snack in Europe (58%), bread/sandwiches in the Middle East (47%), ice cream in Latin America (63%) and potato/tortilla crisps in the US (63%).

 

Chile’s fruit exporters association (ASOEX) has estimated the losses to the country’s exports to China at close to US$100 million. This news was announced at the second meeting of the public-private table where the effects of the coronavirus on Chilean exports to China were analysed. The meeting included chaired the Minister of Foreign Relations, Rodrigo Yañez and the President of the Association of Fruit Exporters of Chile AG (ASOEX), Ronald Bown Fernández.

“After the end of the Chinese New Year celebrations, there were expectations of a revival in trade. However, on Monday, February 10, only 68 containers of cherries were sold. While in total, during the first 48 hours of operations in the wholesale markets in Shanghai, Guangzhou, Beijing and others, only 249 containers of the existing fruit stock in the chain were sold, estimated at 1,500 containers of cherries,” said the President of ASOEX. He added: “The first sales prices have been lower than expected, also in relation to the values ​​reached before the Chinese New Year. We believe that if the current trend were maintained, lower revenues could be projected for the cherry export sector of between US$70 and 80 million. But if we add other fruit species to this, we could reach losses of about US$100 million. However, this could vary depending on how the situation develops. So, we are constantly evaluating the market and conversing with our representatives in China.”

There is also concern about the fruit in transit to China, estimated at 1,600 containers, whose expected arrival dates are between now and March 15. These shipments contain about 59 containers of blueberries, 173 containers of cherries, 872 containers of plums, 387 containers of nectarines, 30 containers of avocados and 134 containers of table grapes. 

The Chilean fruit export industry has adapted its export promotion strategy in China, which includes facilitating the consumption of the basket of fruits exported by Chile, including cherries, blueberries, peas and table grapes, to highlight their nutritional benefits. The consumption of fruits will be promoted via online media and in retail chains and the sector will continue to donate fresh fruit to clinics and health centres. The first delivery will consist of 1,000 1.5 kg boxes of blueberries, donated to the lung hospital of Shanghai.