Corona impacts Meatco markets

Meatco pointed out that customers worldwide experienced challenges because of the coronavirus outbreak, such as the travel prohibitions that affected the hospitality industry, which consumes most of its high-value beef products.

01 September 2020 | Agriculture

STAFF REPORTER

WINDHOEK



The outbreak of the coronavirus pandemic affected Meatco like most other businesses in Namibia, but because the company was declared an essential service under the state of emergency regulations, the impact was reduced tremendously.

Amid the outbreak, Meatco could export its products to international customers with minimal delays because of the enabling flow at the harbours.

According to Meatco, slight delays in exports to the Chinese market were reported because of their systems, which Meatco managed to mitigate with no negative business implications.



Belt-tightening

Meatco pointed out that customers worldwide experienced challenges because of the coronavirus outbreak, such as the travel prohibitions that affected the hospitality industry, which consumes most of its high-value beef products.

“Although consumers continue to eat, the reality is that what we consume at restaurants and what we consume at our private dwellings differs tremendously.

“This change in consumption patterns disrupted the balance that we require to arrive at the maximum value out of a carcass that Meatco purchases from farmers. Consequently, maintaining the balance on returns from our carcasses remains the biggest challenge,” said Meatco's executive for livestock procurement, Andre Mouton.

According to Meatco, this was the same in all markets, be it Namibia, South Africa, Norway or the United Kingdom.

However, looking at the markets separately, the UK market statistics indicated a shift in consumption patterns to high-value cuts because of the stay-at-home policy, which increased home-cooked meals exponentially.



Norwegian market

Norway remained Meatco's premium market regardless of the current unfavourable trading patterns.

Besides the coronavirus pandemic, the general slowdown in oil prices also negatively affected Norway's oil-based economy. This means the value paid for Meatco's products slightly decreased, although they still managed to derive high maximum returns due to a weakening in the South African rand.

However, Meatco said carcass prices across Europe are normalising and according to Mouton, this indicates an improvement in the expected price yields.

Meatco added that after the coronavirus was recently detected on the outer packaging of imported Ecuadorian shrimp, the Chinese authorities concluded that the virus can be transmitted through packaging material and have increased the inspection of plants that export to that country.

“Meatco underwent an extensive virtual coronavirus audit and passed it exceptionally. This indicates that it is indeed costly doing business with the Chinese, however, it is worthwhile as China is the world's largest consumer market of beef and imports both bone-in beef cuts and offal that deliver higher returns,” the company said.

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