Corona virus seems to be everywhere. At least as a HOT TOPIC. So, for us the question comes naturally, how does it affect the pet food industry?
As a global business with ingredients and final products supplied around the globe, it may or may not have an affect on all aspects of the business starting with ingredients over logistics as well as business events that are related to our industry.
We throw a light on the different aspects and will update the article in case of any furhter news.
Which affect will the Coronavirus have on production and supply from China?
Region of the first major outbreak is the province Hubei in China. This area is a center for some of the key amino acids used in pet foods around the globe. Taurine e.g. is under major pressure at the moment. Prices, that have been very low before the Chinese New Year celebrations in February are now almost tripled. Other amino acids like Glycine and L-Cysteine start moving but certainly not to that extend (yet)
From our knowledge today, the main affect here is that producers of e.g. Carrageenan slowly get back to market which at the moment eases the supply of some ingredients. On the other hand there might be gaps of supply and higher demand in the market when every one is really back in the market.
Logistics that work is a key success factor for eany industry. More and more efficient supply chains with just in time production in some cases start to struggle with such major incidents. Well prepared managers will have put measures into place to secure their sites are supplied over a certain period with shortages. Howeer, wha, if situation continues to be difficult for longer than 2, 3 or more weeks or even months?
Many ingredients and also final products going from Asia to Europe and other parts of the world will go through hubs in China and other major ports in Asian region. Some forwarders already announce delays and that ships go out with as low as 10% of their total capacity. And it is the other way around with goods coming into China as not enough workers are at the ports to handle them. Read this article from wall street journal
With ITB just being cancelled in Berlin, a major event for global travel indutry, questions raise which affect the Coronaviurs may have on major events in pet food industry.
While Global Pet Expo® was held in Orlando, other events like Interpets in Japan, supposed to be held end March in Tokio have been cancelled.
Organizers of the Interzoo monitor the situation very closely. This includes a permanent exchange with the health authorities. Any major news will be announced on their website for sure interzoo.com/en/news
PLMA – another major event also for the pet food industry taking place in Amsterdam each year. We have not found any update yet, but any news will surely be announced in their news section – plmainternational.com/news-update
With all tthe benefits of glabalization, Coronavirus shows the impac, that a major incident like that can have on our industry as well.
Many initiatives like the ones of CIPS or APA implement a series of joint-actions not only to insure the sustainability of the business but also to prevent pets from becoming affected by fears from the public.
All togehter as a industry and more profound as humans we can face and overcome the situation with Coronavirus. Main point,as always, is to stay clear take a professional look and take decisions that help ease the situation and transition to a safer future.
Stay strong and safe, wherever you are!