Russian poultry exports to China caught in logistics jam

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Russian poultry exporters are suffering losses because of overstocking at Chinese ports on the back of the continuing Covid-19 coronavirus epidemic in the country, Russian newspaper Agroinvestor reported.

Russia exported 62,600 tonnes of poultry to China, representing $ 143.4 million, the Russian Agricultural Ministry estimated. Thanks to the opening of the Chinese market Russian companies managed to boost the overall revenue from poultry export by 65% to $ 329 million. Numerous Russian companies said they were going to expand poultry export to China even further in 2020.

There are disruptions in transport infrastructure in the Chinese sea ports, Andrey Terekhin, chairman of the export department of Cherkizovo said. The demand for Russian poultry in China is high given the African swine fever (ASF) outbreaks, but the closure of some sea ports has led to a shortage of refrigerator containers, Terekhin explained. This is believed to be a common problems affecting not only Russian poultry companies, but rather all poultry businesses exporting their products to China. In total, China imported around 700,000 tonnes of poultry in 2019.

Frozen poultry products are coming in refrigerator containers, which are needed to be connected to the electrical grid, but there are no free slots, because the commodities which arrived earlier are not going further down the supply chain, said Albert Davleyev, president of the Russian consulting agency Agrifood Strategies. Both suppliers and carriers are now suffering substantial losses, Davleyev said, adding that some of the biggest suppliers have put exports to China on hold.

Demand drops as restaurants stay closed

Some supplies are being diverted from China because of a lack of capacity to store additional cargo. There are numerous factors affecting poultry import in China, said Sergey Lakhtyukhov, chairman of the Russian union of poultry producers. Alongside the shortage of refrigerators there are also some problems in the bank sector, resulting that local companies are unable to make payments for shipments, Lakhtyukhov said. There is also a problem of less demand for chicken feet as restaurants and canteens stay shut, Lakhtyukhov explained.

 

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