{"id":65552,"date":"2020-02-25T09:19:31","date_gmt":"2020-02-25T14:19:31","guid":{"rendered":"https:\/\/www.agribusinessglobal.com\/?p=65552"},"modified":"2020-02-25T09:19:31","modified_gmt":"2020-02-25T14:19:31","slug":"covid-19-update-china-tries-to-restart-this-week-but-global-economies-blink-as-containment-appears-unlikely","status":"publish","type":"post","link":"https:\/\/www.agribusinessglobal.com\/es\/markets\/covid-19-update-china-tries-to-restart-this-week-but-global-economies-blink-as-containment-appears-unlikely\/","title":{"rendered":"Actualizaci\u00f3n de COVID-19: China intenta reiniciarse esta semana, pero las econom\u00edas globales parpadean porque la contenci\u00f3n parece improbable"},"content":{"rendered":"<p>Now three months since the first suspected community spread of <a href=\"https:\/\/www.agribusinessglobal.com\/?s=coronavirus\" target=\"_blank\" rel=\"noopener noreferrer\">COVID-19<\/a> in Wuhan, China, and more than a month since initial quarantines were enacted, governments around the world are all but giving up on containment and preparing for global community spread and the economic backlash that is almost inevitable amid an already sputtering global economy.<\/p>\n<p>Here\u2019s a recap of what we know as of Feb. 24:<\/p>\n<ul>\n<li><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-65553\" src=\"https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic.jpg\" alt=\"Coronavirus graphic\" width=\"425\" height=\"239\" srcset=\"https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic.jpg 896w, https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic-300x169.jpg 300w, https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic-768x432.jpg 768w, https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic-860x483.jpg 860w, https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic-501x282.jpg 501w, https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic-136x77.jpg 136w, https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic-330x186.jpg 330w, https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic-128x72.jpg 128w, https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic-640x360.jpg 640w, https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic-16x9.jpg 16w, https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic-32x18.jpg 32w, https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic-64x36.jpg 64w, https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic-325x183.jpg 325w, https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic-85x48.jpg 85w, https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic-150x84.jpg 150w, https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic-318x179.jpg 318w, https:\/\/d6kq167ddwbdq.cloudfront.net\/farmchemint\/wp-content\/uploads\/2020\/02\/Coronavirus-graphic-635x357.jpg 635w\" sizes=\"auto, (max-width: 425px) 100vw, 425px\" \/>Community spread is confirmed in four of the world\u2019s top-12 economies: China, Japan, Italy, and South Korea, which contribute about 27% of global GDP, <a href=\"https:\/\/www.imf.org\/external\/datamapper\/PPPSH@WEO\/OEMDC\/ADVEC\/WEOWORLD\" target=\"_blank\" rel=\"noopener noreferrer\">according to IMF<\/a>. Japan\u2019s economic growth was projected to be a paltry 0.3% before the virus.<\/li>\n<li>Germany\u2019s economy had begun stumbling before coronavirus on a weak industrial sector, which includes chemicals. The world\u2019s fourth-largest economy had been clinging to a 1% growth rate for the past few quarters, and analysts are not yet prepared to predict how the coronavirus will affect the country\u2019s economy.<\/li>\n<li>The International Monetary Fund told world financial leaders at the G20 meeting in Riyadh over the weekend that coronavirus is a real risk to the global economy and predicted that the epidemic would shave 0.1% off global growth. Global growth was poised for an uptick of 3.3% growth compared to 2.9% last year.<\/li>\n<li>Infections have been reported on five continents, although only one case exists in Africa (Egypt), and Australia (22 cases) is the only country affected in Oceania.<\/li>\n<li>Although 99% of cases (totaling 79,331 on Feb. 24, <a href=\"https:\/\/www.who.int\/docs\/default-source\/coronaviruse\/situation-reports\/20200224-sitrep-35-covid-19.pdf?sfvrsn=1ac4218d_2\" target=\"_blank\" rel=\"noopener noreferrer\">according to WHO<\/a>) occur in China, the recent unexpected outbreaks in Italy, Iran, and South Korea have health officials worried that global spread is probable, and national governments should be prepared for community transmission elsewhere.<\/li>\n<li>Stock markets tumbled Feb. 24 at the looming reality of the economic impact outweighed the investor optimism that had propped up markets for the past couple months. <a href=\"https:\/\/www.marketwatch.com\/tools\/marketsummary\/indices\/indices.asp?indexid=1&amp;groupid=37\" target=\"_blank\" rel=\"noopener noreferrer\">Major indices<\/a> around the world lost between 2% and 3.5%, emasculating much of the year\u2019s gains.<\/li>\n<li>Goldman Sachs Chief U.S. Economist Jan Hatzius hedged U.S. growth 0.2% Feb. 24 with the implication that supply chain disruptions as a result of halted production in China could persist beyond Q2. The U.S. government has begun discussions to allocate emergency and research funds to fight the virus.<\/li>\n<\/ul>\n<h2>What It Means for Crop Protection<\/h2>\n<p>Several sources inside and outside of China say factory production for agrochemicals has maintained about 50% production capacity through the Chinese New Year holiday, and production has stayed constant. Large producers often keep a skeleton crew through the holiday so companies can meet demand. These workers who stayed to staff factories during the Chinese New Year effectually were already quarantined in or near factories and have been able to staff those factories during the past two months.<\/p>\n<p>However, while production has been trudging along, goods cannot be brought to market because transportation systems have been crippled by quarantines that have prohibited the transport of non-essential items. Inventories are piling up at ports, workers are slow to return to work at ports and trucking companies due to mandatory 14-day quarantines before they can pass medical clearance, and the backlog of merchandise entering and leaving China means that products cannot move from factors to ports for shipment.<\/p>\n<p>This dynamic throughout China has halted the supply of raw materials to factories to make technical-grade products, and technical-grade products cannot travel to formulation facilities. The result will be inevitable supply disruptions becoming more significant in Q2, and many companies are bracing for disruptions to continue for much of 2020.<\/p>\n<p>\u201cRaw materials and\/or finished products cannot be shipped from China, and this means companies cannot manufacture or distribute the products,\u201d says Dr. Piyatida (Tung) Pukclai, Business Development, <a href=\"https:\/\/www.knoell.com\/en\/home\" target=\"_blank\" rel=\"noopener noreferrer\">Knoell<\/a> Thailand. \u201cEven if China managed to export, the countries of destination are putting strict quarantines on the materials, which means more delay of the supply cycles.\u201d<\/p>\n<p>In the short term, spot-traders could manipulate prices to take advantage of market conditions. But more questions remain for long-term access amid limited logistical capacity and the possible supply shortages later this year as a result of the domino effect of transportation stoppages. Smaller buyers might have trouble securing typical orders.<\/p>\n<p>\u201cLonger term, China suppliers will guarantee the supply to key accounts like multinationals as priority,\u201d says <a href=\"https:\/\/www.agribusinessglobal.com\/author\/david-li\/\">David Li<\/a>, Business Manager for Beijing-based SPM Biosciences. \u201cIt [access] will depend on the percentage of business a global distributor contributes to the sales of Chinese suppliers.\u201d<\/p>\n<p>Other analysts say that while inventories might be sufficient to meet demands of current contracts, longer-term disruptions could trigger <em>force majeure <\/em>clauses to insulate suppliers from future uncertainty. That could come at a higher price for buyers, even under existing contracts.<\/p>\n<p>\u201cThe Contract is one thing, but if one wants products, one needs to pay more. Otherwise, suppliers just invoke the <em>force majeure<\/em> clause, and buyers get no goods. Goods go there where the prices and returns are higher \u2014naturally,\u201d says <a href=\"https:\/\/www.agribusinessglobal.com\/agrochemicals\/qa-with-c-s-liew-global-perspective-with-an-eye-on-efficiency-quality\/\">CS Liew<\/a>, President of <a href=\"https:\/\/www.agribusinessglobal.com\/sourcing\/company\/pacific-agriscience-pte-ltd\/\">Pacific AgriScience<\/a>. \u201cProducts produced over the Chines New Year period can\u2019t be priced the same as before CNY. The cost of production would be higher in view of the need to pay the workers more to work over the holiday period. And, with the current shortage arising from the delays in resuming production, there is no way price would not rise \u2014 production economics dictate a rise, and opportunistically, it also needs to rise.\u201d<\/p>\n<p>Although China has shown almost a week of fewer cases, unexpected spread in other countries could further complicate logistics and further hamper confidence in a world economic system that continues to deglobalize amid trade tensions, populism, and disease threats, which unlike national governments, observe no borders.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>La producci\u00f3n de agroqu\u00edmicos se ha mantenido estable en China en aproximadamente 50% de capacidad, pero las cuarentenas contin\u00faan obstaculizando los puertos, el transporte por cami\u00f3n y la capacidad de llevar mercanc\u00edas al mercado mientras los brotes amenazan a otras econom\u00edas importantes.<\/p>","protected":false},"author":110,"featured_media":65553,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[28,5],"tags":[1058,1796,54],"class_list":["post-65552","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-asia","category-markets","tag-china","tag-coronavirus","tag-featured-home"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>COVID-19 Update:\u00a0China Tries to Restart This Week, But Global Economies Blink as Containment Appears Unlikely - AgriBusiness Global<\/title>\n<meta name=\"description\" content=\"Agrochemical production has been steady in China at about 50% capacity, but quarantines continue to hinder the ports, trucking, and the ability to bring goods to market while outbreaks threaten other major economies.\" 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