Meat Market Tenderized by China Tops a Big Week for Global Food

China has taken some unprecedented and unexpected steps to stir confusion and controversy when it comes to linking coronavirus outbreaks to food, acting against the advice of experts who say there’s little science backing the connection.

The country’s customs officials are asking global food exporters to sign a document that assures they’re meeting Covid-19 safety requirements to prevent transmission of the virus. This comes just after the Asian nation slapped a ban on poultry shipments from a plant owned by Tyson Foods after the company reported infections at the Arkansas site.

Some food producers — including Tyson — are signing the requested affidavits.

But there’s also been a fair amount of push-back, and regulatory agencies are being sure to note that there doesn’t appear to be any evidence linking virus infections to food.

Australia’s government issued a statement dated Tuesday that cited the World Health Organization, saying “transmission through food is highly unlikely.”

A day later, the U.S. took a similar stance.

‘Known Science’

“Efforts by some countries to restrict global food exports related to Covid-19 transmission are not consistent with the known science of transmission,” U.S. Agriculture Secretary Sonny Perdue and Food and Drug Administration Commissioner Stephen Hahn said in a joint statement.

China’s moves on this issue have also seen twists. At first, the country was linking a new outbreak in Beijing to a chopping board used by a seller of imported salmon, but then the country’s National Health Commission said there was no evidence showing the fish is either the origin or intermediate host for the virus.

In any case, just the suggestion from China that the country could make it harder for imported food to flow freely can spook markets. Hog futures traded in Chicago are on pace for a weekly loss, as are soybeans. Pork and soy are two of the biggest U.S. farm exports to China.

Of course, all this is happening set against the backdrop of the U.S.-China trade deal, with Beijing pledging to buy more than $30 billion worth of American agriculture goods this year.

So far the Asian country has fallen way behind the purchasing pace that would be needed to meet that promise. And traders fear that this latest turn will only be a further impediment.

China’s request for the exporters’ affidavit isn’t about trade, according to people familiar with the matter. Instead, it was meant to ease consumer concerns over the safety of imported products such as meat. But that still raises the question of over why the link between the virus and food was drawn in the first place.

—Millie Munshi, Bloomberg’s Global Food Czar

Charted Territory

The U.S. meat crisis that saw plants shutter after thousands of workers fell ill with coronavirus has reduced the country’s frozen stockpiles of animal protein. Red-meat inventories last month hit the lowest since 2014, driven by a drop in pork supplies in cold storage, according to U.S. Department of Agriculture data published Monday.

The Week’s Must Reads

• Famine risk | For a country on the brink of famine, Venezuela is seeing a disturbing amount of food going to waste.
• Spreading fast | The latest flurry of coronavirus cases across European meat plants has confirmed their status as pandemic hotspots and is now starting to disrupt shipments to key customer China.
• Restaurant retreat | With each week, more data emerges to show how the Covid-19 pandemic is permanently reshaping the restaurant industry through bankruptcies and other dislocations.
• Spam sensation | Canned meat is having a moment. Demand is booming from the U.K. to South Korea, where Spam is an old favorite, sales are expanding at the fastest pace in years.
• Pig pile-up | The obvious obstacles in America’s food-supply chain — from shuttered meat plants to restocking delays and panic buying — have largely dissipated. But shock waves remain.
• Tracking swimmers | Consumers around the world will soon be able to know intricate life details of the salmon they eat with a new blockchain initiative from top exporter Norway.
• Old timers | Spain’s Rubia Gallega cattle can live for more than a decade munching grass, packing on muscle and developing layers of buttery golden fat before they’re considered plate-worthy.
• Grain drain | The outlook for wheat harvests in the European Union’s top shippers is growing slimmer, shrinking export prospects for the season that kicks off next month.

On the Bloomberg Terminal

• Fast-food nation | U.S. quick-service industry discounting will heat up in 2H as dining rooms reopen, stimulus-check spending fades, the recession wears on and breakfast competition increases, writes Bloomberg Intelligence.
• Spicy slowdown | McCormick’s flavor solutions segment will likely remain a drag for the rest of the year as the coronavirus pandemic forces food-service companies to limit operations, curbing some of the gains from the consumer segment, according to Bloomberg Intelligence.
• Use the AHOY function to track global commodities trade flows.
• Click HERE for automated stories about supply chains.
• See BNEF for BloombergNEF’s analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.
• Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts.eco

Source: bloomberg

Date: 27.06.2020