Coronavirus and agriculture – how worried should we be?
The coronavirus outbreak is already having a severe impact on China’s foodservice and on-trade channels and this could become “more serious and longer-lasting” if the virus is not contained in the next six to eight weeks, leading agribusiness banking specialist Rabobank has warned.
But the extent of the impact on Australia’s agricultural sector will be limited in the short-term and will depend on how quickly the virus is contained, it says.
In a just-released report by the bank’s China-based research team, Recent Coronavirus Impacts on Chinese F&A, Rabobank says “disruptions are being experienced across the entire F&A (food and agri) supply chain” with the virus – which has infected more than 40,000 people to date – disrupting trade, production and supply chains as well as having a significant impact on out-of-home food consumption with the closure of many foodservice outlets.
With the virus outbreak arriving at the peak of 2020 Chinese New Year activities, it has had a large impact on out-of-home dining in the country, the report says.
“Given what we have seen on the ground, along with news received from major chains – for example, the closure of stores by Starbucks, Haidilao, McDonald’s, and Yum China – potential revenue losses for both retail and foodservice for the Chinese New Year week could range from 20 per cent to 80 per cent”. A loss of between USD 31 billion to USD 124 billion across retail and foodservice, it says.
While the report says a quick and effective containment of the virus could lead to a rapid bounce-back, the longer the virus is uncontained beyond March, the more extensive, sustained and structural the impact will be on the F&A chain.
Regardless of when coronavirus is contained, Australian-based head of Rabobank Food & Agribusiness Research, Tim Hunt says it will “almost certainly” have a larger impact on food and beverage industries than the global SARS (Severe Acute Respiratory Syndrome) epidemic in 2003 – including in Australia.
Discussing the current and potential impacts of the virus on Australia and New Zealand’s food and agribusiness industries in a podcast, Coronavirus: How worried should we be, Mr Hunt says coronavirus has already sp