Salmon-linked Covid-19 outbreak risks causing havoc to food trade

Hello from Hong Kong, where the cinemas have reopened — with a slight twist. They’re still selling food, but you can’t actually bring it into the screen with you. This might be to ensure customers wear masks at all times, or to save money on cleaning up popcorn spillages. It might, alternatively, be about a deeper issue, which is the subject of our main piece today.

Policy Watch looks at Japan’s deadline to the UK: strike a trade deal in just six weeks or else. Our chart of the day looks at turmeric exports, which are on the rise as people turn to health foods during the pandemic.

Fishy trade

The coronavirus pandemic is indelibly linked to food. Google trends show an explosion of global interest in the term “wet market” since late January. Online videos soon linked the origin story to perceptions of (and stereotypes about) Chinese culinary tastes.

Last weekend, a prominent outbreak at a Beijing market reinserted food into the narrative. Rumours that new cases stemmed from a salmon chopping board spread rapidly, leading to reports that traders had cancelled seafood orders from overseas. Global Times, a state-media tabloid, claimed there was a “nationwide boycott” of salmon.

The reaction appeared to show, once again, how vulnerable supply chains are to the pandemic. China and its rapidly growing middle class import large quantities of food each year. The question is whether widespread concerns over food safety — in any direction — stand to have an impact on trade.

The first thing to point out is that, while food preparation presents clear risks, the recent concerns over trade have an uneasy relationship with the science. The World Health Organization in April said there was “no evidence to date of viruses that cause respiratory illnesses being transmitted via food or food packaging”. Last week, it more subtly said that salmon packaging was not the “primary hypothesis” for the new outbreak.

The Chinese government itself appeared to agree; saying itself that there was no evidence salmon was the host, or that it carried the virus before it entered the market. But, at the same time, citing the concerns of the general population, it unveiled new testing on food imports from high-risk countries. Last week, customs authorities tested more than 15,000 samples, all of which they declared to be negative.

That approach mimics the evolution of the virus itself, which was initially exported from China to the rest of the world. The Chinese government, in its data covering the pandemic, outlines cases that are specifically imported from overseas; it largely shut down international travel in March, and imposes quarantine measures on new arrivals.

German soldiers outside an abattoir company in Rheda-Wiedenbrück after hundreds of employees tested positive for Covid-19 © Ina Fassbender/AFP/Getty

Earlier in the outbreak, food was an opportunity: in April, Auckland airport announced it was filling empty passenger planes with fresh produce and sending them to China. But fears that the virus could be imported into China might be a problem for companies that, well, export to China. Cargolux, a Belgian cargo airline, says it has stopped the export of all perishable products to Beijing, Shanghai and Xiamen as a “precautionary measure”.

Last week, the Norwegian Seafood Council pointed out that the Chinese government ruled out salmon as the source of the infection, but added that it was “too early to say” what impact the new outbreak would have on exports.

In a response to questions following last week’s scare, Jeremy Helson, chief executive of Seafood New Zealand, a group that represents businesses in the sector, said the earlier closing of China’s borders had hit exports, especially lobster, and a second outbreak would have a similar effect. But he noted, in a sign of the pressures on food safety, that the country’s “reputation for safe food grown in a clean environment ensures the product is in demand when markets allow”.

New Zealand also has an extremely low number of new infections. A slightly different example emerged in the case of Tyson Foods, one of the biggest meat companies in the US, where the virus continues to rage. On Sunday night, China suspended imports of its chicken on the back of an outbreak among staff at one of its facilities.

The interconnected nature of modern food supply chains imply certain limits on how far suspensions like this will realistically occur. But the mere belief that food presents risks could create volatility at the margins, encouraging switches to imports from virus-free countries or from sectors less associated with recent outbreaks.

This could happen through consumer preferences via the news flow (elsewhere on Monday, a new wave of infections emerged in German abattoirs). It could also more directly occur through governments eager to exhibit their zealousness in defending their borders against renewed outbreaks.

A recent clampdown on Chinese imports of beef from Australia came after that country demanded, alongside others, an inquiry into the virus’s origins. New outbreaks could soon be integrated into an emerging framework of punitive trade measures that, in turn, respond to rising geopolitical tensions.

In short, for trade, it might not matter whether or not the virus is actually alive in the food. All that matters is that it’s there symbolically.

Charted waters

Turmeric, ginger and other spices are enjoying a popularity bump during the pandemic as consumers search for “health halo” ingredients that will boost their immune systems. The spike in demand has been a boon for producers in Asia and beyond, though some in India find their efforts to meet higher demand are being thwarted by difficulties in securing transport and getting customs clearance.

Policy watch

UK trade secretary Liz Truss, right, holds a video conference call with Japan’s foreign minister Toshimitsu Motegi, as they begin negotiations on a free trade agreement © 10 Downing Street/AFP/Getty

Japan has given the UK just six weeks to strike a post-Brexit deal, putting Boris Johnson’s government under pressure to agree one of the fastest trade negotiations in history — and Britain’s first in more than 40 years, write Robin Harding and Sebastian Payne.

Time is so short that both sides will need to “limit their ambitions”, warned Hiroshi Matsuura, Tokyo’s chief negotiator, in comments that dash UK hopes of winning deep trade liberalisation from Japan.

While meeting the timetable would hand Johnson an early trade victory, it also highlights the risk of the UK being bounced into bad deals before the Brexit transition expires at the end of the year.

Striking a trade agreement with Japan is one of the main priorities for Liz Truss, the UK’s trade secretary, who hailed the start of talks as a “historic moment” for both countries. When the talks began two weeks ago, she said the UK and Japan had signed up to an “ambitious timeline” to complete the negotiations.

Most comprehensive free trade deals normally take years to agree, but Matsuura said there was almost no time left if Japan was going to ratify a deal this year.

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