China | Border Problems Intensify | Import channels for pork offal and poultr...
China
Border Problems Intensify
Import channels for pork offal and poultry have tightened over the past two weeks as Chinese authorities continue to dribble out licenses and south China transportation companies raise freight rates from Hong Kong to south China ports. Hong Kong traders describe the situation as “ugly” as containers stack up on Hong Kong ports and more products continue to arrive from all North and South America, and Europe. Demurrage could soon reach $200 per container according to one trader, killing what thin margins usually exist for China traded products.
The problems are most acute for frozen chicken paws and wingtips. Last week, transportation fees from Hong Kong to south China reached $750/mt, a level that for some shipments is more than the CIF value of the product. Prices within China for some U.S. poultry items have hit an all time record, as increased freight rates are passed through the marketing chain. The current problem come at a bad time for U.S. shippers, as items such as wingtips enjoy seasonably high demand in China’s muggy summer.
Pork offals – mainly hearts, kidneys and livers - are also suffering from the slowdown although Hong Kong to China freight rates have not spiked as they have for poultry. Rather, the problem has been the lack of licenses issued for pork offal. Some traders report that licenses are available for pork by-products such as hocks, riblets, front feet and ears, but Chinese import authorities (State General Administration for Quality Supervision and Inspection and Quarantine - AQSIQ) have not been issuing licenses for offal.
A fuller account of the China situation will be in the June 10 Export Newsline.