Gulfood 2020: Coronavirus outbreak impacting food imports, say traders

Freight tariffs going up as are wholesale prices

Dubai: Food imports of specific items coming from China have been affected in the aftermath of the outbreak of novel coronavirus infection, food traders revealed at the 25th edition of Gulfood 2020 that opened in Dubai on Sunday.

Freight tariffs going up

Amit Sethi, managing director of Asia and Africa Food Trading, cautioned that if the status quo on the virus outbreak continued, bilateral trade between continents would be affected and consumers could expect a hike in food prices in the next six months.

“We as re-exporters to various countries from the UAE will be impacted. China was a major exporter to Africa. If we have 100 containers of food items we imported from China, in return there were limited amounts of agro items such as soya beans, raw almonds, beans and legumes coming in from Africa. So now freight tariffs have gone up as there are few containers coming from China. We are able to negotiate good rates in exchange for the few containers coming in from Africa. This is becoming difficult. If things continue this way for six months and the wholesale prices as well as freight tariffs continue to go up, it will impact food prices.”

Lower imports from China

Major wholesale and retail food trading companies in the UAE have shifted the major traditional imports from China to neighbouring countries and are absorbing the impact of spiked up food pricing in the aftermath.

Dhananjay Datar, owner of Al Adil Food Stuff Trading, said: “The impact of coronavirus on my line of business is negligible. But as I understand from the market sources here, those who have been dependent on products from China as well as the markets that are in proximity to China have been deeply affected and they may take time to recover. It is a known fact that food traders here in the UAE are more dependant on food stuff import from Thailand and Malaysia rather than China. So those companies may not be affected.”

He said: “We were importing spices like dehydrated garlic and onion powder, citric acid and lemon salt from China. We have stopped this temporarily and found substitute importers in India. Perceiving the demand, wholesale prices have gone up. For instance, dehydrated garlic powder which cost us Dh6 a kg from China is being obtained at Dh7.50 a kg. Similarly other prices are going up. But we are absorbing the price rise now and consumers will not be affected.”

Salim Musa Al Kandy, director of meat exports at Lulu Group, said: “All food stuff importers in the UAE will be able to absorb price increase at least for another six months. We have our stocks.”

The group has stopped exporting meats to China, which they were doing through Hai Phong port in Vietnam.

Kandy added: “Imports of certain items such as ajninomoto, China grass etc have been impacted while most others we are able to import from Turkey, India, Malaysia, Vietnam and other countries. The UAE ministry has taken all necessary precautions with recommendations from WHO and it’s not a cause for concern as of now. In fact, import of certain frozen items such as cabbage is still coming via seaports. We just got a container of frozen cabbage from China.”

Food security preparedness

Tariq Al Wahedi, CEO of Agthia Group, a semi-government enterprise that owns 40 per cent market share in flour, grains, animal feed and bottled water supply in the UAE, said: “As part of the nine member Food Security Alliance for the UAE food security initiative, we are well-prepared to be sustainable in the face of any such emergency such as national disaster or epidemic outbreak. We were able to help neighbouring countries such as Oman during cyclone Gonu.”

Al Wahedi added that in times of emergencies, there is a specific food protocol in place. “We take part in the alternative service where they train personnel so that they are capable of taking over the facility and production for our products on their own.

"The food security initiative has made sure we have enough supply to last us for a long time and the UAE is one of the most stable and sustainable countries with preparedness for any kind of natural or man-made disaster that can disrupt food imports," said Al Wahedi.

Published:  February 16, 2020 15:44 Suchitra Bajpai Chaudhary, Senior Reporter
https://gulfnews.com/uae/gulfood-2020-coronavirus-outbreak-impacting-food-imports-say-traders-1.69746636

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