Despite efforts by countries affected by the coronavirus to control its spread, it is impacting global business.
Many analysts said the virus is hurting global economic growth.The United Nations Conference on Trade and Development (UNCTAD) said the outbreak could cost the global economy $1 trillion this year.
Also, UNCTAD said the coronavirus epidemic is disrupting world trade and could result in a $50 billion decrease in exports across global value chains. Indeed, exporters have been hard hit.
Last month, some exporters saw huge decline in outward shipments as countries close borders and order cancellations increase due to the spread of Covid-19.
With people limiting travel and hunkering down due to fears of COVID-19, the impact caused by the virus on businesses, such as restaurants, hotels, resorts and airlines have bleed into the food and agriculture sectors.
Big ticket importers of agro produce countries, such as United States(U.S.), UAE, Germany, United Kingdom (U.K.), Singapore, Italy and China have also taken precautionary measures on food safety to prevent the spread of the virus and impact on their economies.
The rapidly-spreading coronavirus outbreak continues to rattle global markets as experts assess the risks posed by the virus to economies. Experts have warned of the impact it may have on agro exports. .
One of them, a former Dean, Faculty of Agriculture, University of Ilorin (UNILORIN), Prof Abiodun Adeloye, said the effects of the virus could slow global growth and hurt agricultural exports.
He said coronavirus poses a significant risk as demand for agricultural products has declined under restrictions put in place to contain the outbreak.
He expects reduced exports in places hard hit by the virus, and said loss of income in those places will further curtail export demand on a longer term.
The Executive Secretary, Institute of Export Operations and Management Nigeria, Ofon Udofia, said commodity markets have been hard hit.
He noted that while international ports and their customs offices were operating fairly smoothly, the difficulties lie in getting agro exports to and from the docks because of restrictions brought by the virus into the shipping system.
Due to the coronavirus outbreak, he warned that agro exports growth would dip, though its exact level was still difficult to predict.
He underscored the importance of coordinated action to limit the economic effect of the virus.
The importance of China
China is the largest crude oil importer in the world with a staggering 506 million tonnes of crude oil imported last year. She buys oil from Nigeria. But oil import from China has dropped.
Udofia said the shutdown of China has contributed to the transitory slump of crude oil imports.
His concern is that the oil price slump will affect the country. He believes that the coronavirus outbreak would exacerbate the negative economic effects.
He noted that travel restrictions due to the virus had also impeded the transportation of goods in and out of China.
Because of continued quarantines in China, he observed that problems remained for unloading shipments at docks and transporting goods to domestic destinations and delivery or pickup of those goods for consumers.
Apart from general exports, exporters have continued to report a shortage of shipping containers for agro produce bound for China.
At the same time, agro exports and empty containers are piling up at the ports of the Asian country, he said.
Udofia said it was a nightmare getting agro exports to China.
For instance, he mentioned that it has been challenging getting sesame to China as freight forwarders have had a very hard time clearing shipments at the ports.
China buys Tumeric, Ginger and sesame from Nigeria. Currently, some shipping containers are unable to dock at Chinese ports.
According to him, the disruption to China freight movement is being felt across major ports, including Nigeria.
Rippling effects of virus
While the death toll is the most important factor, the rippling effect of the virus is being felt in the shipping industry. According to experts, global shipping has been one of the biggest casualties. More tonnage of container ships can be found around the world. Coronavirus is upending the logistics of global shipping and plunging exports, especially farm products.
Speaking with The Nation from the United States, the Chairman, Policy Advisory and Conflict Resolution Committee, Lagos State University (LASU), Prof. Martins Anetekhai, said coronavirus has damaged the world trade, economy, and of course, the shipping industry.
Anetekhai, who is a fisheries expert, added that the food industry has been also under pressure, while the impact on the shipping industry has been substantial.
He said US and UK were virtually shutting down mobility of citizens, closing businesses and controlling transportation to stop the spread of the deadly virus. As a result, imported products are getting backed up at the ports.
Anetekhai said the problem make foreign countries to role out measures that could lead to more rejection of Nigeria’s agro produce abroad. Several consignments of agriculture produce shipped to Europe have again been rejected and destroyed over poor quality and presence of high contents of poorly mixed agro chemicals used to treat or preserve them.
He feared that Europe would strengthen produce standards requirements to constitute a more significant barrier to agro exports from Nigeria. The top destinations for Nigeria’s agri-food products are the U.S., Europe, China, Vietnam, India and Japan.
While the impact of COVID-19 is not felt, experts said it was only a matter of time when Nigeria would be seriously impacted as she is significantly dependent on the global economy.
At stake are Nigeria’s agricultural exports, which accounted for 30 percent of all export revenue. Already, oil price is fallen.
The Chief Executive Officer, Multimix Group, Dr. Obiora Madu, said the government needed a package of measures to help ease the economic blow.
Encouraging more Nigerians to export, agro exports, he added, should be one of the strategies.
Madu urged the government to introduce new measures to ensure that food production is not interrupted by coronavirus. These include increasing farm productivity, enabling higher value addition, strengthening logistics infrastructure to improve the sector’s global competitiveness.
As COVID-19 has become a global pandemic, experts expect the impact to be worse, with the economies falling into recession.
Nigeria’s customers with coronavirus
As multiple countries report coronavirus cases, Nigeria’s agro exports to customers could be impacted. A few countries that have reported cases of the coronavirus have trade relationship with Nigeria. These include U.S. Japan, South Korea, Taiwan, Singapore, France, Thailand, Australia, Vietnam, Hong Kong, Malaysia, Canada, Cambodia and Germany.
As a result of the virus outbreak, they are conducting quarantine checks to contain the spread of it. This is having a knock-on effect in the global commodities market.