Supply Lines: Frozen shrimp

Supply Lines
Bloomberg

Ecuador's trade minister is optimistic his country's biggest export market for shrimp will reopen soon.

China is likely to lift restrictions soon on imported shrimp which were imposed this month after the discovery of the coronavirus on packaging, Foreign Trade Minister Ivan Ontaneda said in an interview. The Andean nation moved to reassure Chinese officials by supplying them with full information on health protocols in the industry, he said.

"Ecuador has stepped up to the challenge," Ontaneda said Tuesday over Skype. "We're defending 50 years of quality, of history and traceability."

Although only one of more than 200,000 samples tested positive, that was enough to send shock waves through Ecuador's second-biggest export sector, which employs quarter of a million people. China imports more than half of the country's shrimp.

China's customs on July 10 ordered a halt to imports from three specific packaging facilities after a sample turned up non-infectious Covid-19 genetic material on the exterior of packaging and inside a container.

China has been particularly alert to food safety issues after imported salmon was seen as a possible culprit for Beijing's outbreak last month, though it's not clear that the virus can be transmitted through food or food packaging.

Ecuador, the world's largest shrimp exporter after India, hopes unrestricted trade can resume within one or two weeks, Ontaneda said in the interview.

Already in November, Ecuador had beefed up standards at the request of Chinese authorities to combat a risk of white spot syndrome, a viral infection in shrimp.

"We're the only country in the world where each lot that departs for that destination is tested, passes a laboratory analysis, and thanks to that we've shipped more than 20,000 shrimp containers to China since December with only three or four complaints," Ontaneda said.

Ecuador needs to manage its relationship with Beijing carefully. The finance ministry has asked China to lend Ecuador another $2.4 billion to help solve a fiscal crisis and to agree to a re-profiling of nearly $7 billion in bilateral debt.

Stephan Kueffner in Quito and Matthew Bristow in Bogota

Charted Territory

Thailand is set to lose its status as the world's No. 2 rice exporter this year, as drought and a resilient currency make shipments more expensive than those from other growers including India and Vietnam.

Today's Must Reads

  • Diplomacy unravels | The U.S. forced the closure of China's Houston consulate, in one of the biggest blows to the relationship in decades. Separately, President Xi Jinping urged Chinese companies to step up innovation and help stabilize employment.
  • A new world | The U.K.'s pursuit of global trade deals looks easier said than done in a pandemic. Meanwhile, government granted a $640 million loan guarantee to Ford to support the automaker's exports of engines and transmissions.
  • Plane view | China and France pledged to work more closely in areas ranging from aircraft sales to 5G networks in a meeting that highlighted the countries' biggest economic concerns and an intensifying rivalry with the U.S.
  • Going flat | Coca-Cola confirmed the worst of the slowdown may be over for the international beverage company, but its CEO warned that he expects the global economy to take two to three years to recover.
  • Holding back | Indian companies are pushing back big investment plans in another sharp blow to an economy that is hurtling toward its first contraction in more than four decades.
  • Hoovered up | IRobot warned that its Roomba autonomous vacuums, which are assembled in China, could be hit with U.S. tariffs later this year.
  • Texas hold 'em | The chipmaker Texas Instruments said orders haven't fallen off as much in the pandemic as they did in the last recession but cautioned that the positive outlook isn't a sign the economy is on the upswing.

On the Bloomberg Terminal

  • Maersk outlook | Depending on the near-term evolution of the coronavirus outbreak, the No. 1 player in the container-shipping industry may continue to face weaker demand and increased competition this year, Bloomberg Intelligence writes. 
  • Going long | The Chinese yuan may rise beyond the resistance of 6.9 per dollar, as long as broad dollar weakness continues and capital further pursues Chinese assets, according to Bloomberg Intelligence. 
  • Use the AHOY function to track global commodities trade flows.
  • Click HERE for automated stories about supply chains.
  • See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.
  • Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts.

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