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Christmas Chaos? ASB warns of supply chain issues for food importers and exporters

Photo by Mika Baumeister on Unsplash

ASB’s Trade Disruptions December update has warned of “significant supply chain chaos” for food importers and exporters that could peak at Christmas but continue well into the new year.

“Industry insiders are telling us that fixing supply chain problems won’t be overnight and to expect issues well into 2022,” ASB international trade consultant Paul Gestro said.

“Shipping and logistics companies have also sounded a warning coming into Christmas as we hit the peak import season and also the dairy export season.

“We are told to expect some significant chaos before we get into 2022 and then right through summer.”

ASB listed dairy, forestry and kiwifruit as the most resilient sectors, while seafood, wine and other horticultural produce such as apples were the most exposed to ongoing challenges. Meat was “somewhere in the middle,” it said.

“Logistics challenges are working in tandem with seasonal worker shortages to constrain the apple supply, with similar trend seen in seafood and wine markets,” ASB said.

Looking ahead, ASB said the disruption in supply chain “may actually get worse before it gets better and rises to freight costs could continue, even though the bulk of the Covid-19 hit is behind us”.

“2021 and much of 2022 will be characterised by reduced reliability, container shortages, increased delays and higher costs from global supply chains.”

With increased freight costs, wages rising and other inputs also on the rise, New Zealand business were facing rising costs, which would ultimately be borne by consumers, the bank said.

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