The impact of China’s COVID lockdowns on Australian agriculture
Current strict lockdowns in many major cities in China – as the country tries to eradicate the spread of COVID – are not only affecting its local citizens, but also having flow-on impacts on trading partners, including Australia, according to agribusiness banking specialist Rabobank. Speaking in a recently-recorded podcast, What’s the Impact of China’s Lockdown Wave?, RaboResearch general manager for Australia and New Zealand Stefan Vogel said, in particular, there are four specific impacts of the lockdowns that are set to have increasing ramifications for Australian agribusiness – disruptions to freight logistics, Chinese corn plantings, dairy demand and hog pricing. Freight logistics “The already-stressed global container logistics situation is becoming more complicated due to massive delays around the Shanghai port,” Mr Vogel said. “The dry container index, which tracks average prices paid for the transport of dry bulk materials across more than 20 international routes, increased five-fold through 2021 as a result of COVID lockdowns in different parts of the world. “While the index has since declined and is down 16 per cent since early March and 25 per cent down from the September 2021 highs, it looks likely that the ongoing COVID lockdowns in China will add to continued container logistics issues and keep container freight well above historic levels for 2022 and also likely to remain elevated well into 2023.” Corn plantings Mr Vogel said disruptions to corn plantings in China – the world’s second-largest corn producer and also the world’s primary corn importer – were also raising more concerns in an already extremely-tight global grains markets. “Chinese corn planting faces delays in two key provinces as some farmers are stuck in major cities and are unable to access their fields due to the COVID lockdowns,” he said “We understand the lockdowns have created delays in planting this important feed […]