Coronavirus (COVID-19)

• On 30 March, the Ministry of Industry and Information Technology reported positive news on the return of workers and manufacturing firms across China:
  • 98.6% of major industrial firms have restarted work as at 28 March.
  • 89.9% of employees in industrial companies with an annual revenue of more than 20 million yuan (about US$2.84 million) have returned to their posts.
  • In addition, the Ministry of Commerce reported on 28 March a very strong rebound in the opening of shopping malls (above 95% nationwide) with indicators pointing to positive sales.
  • Chinese consumers have embraced e-commerce and digital retail trade with renewed passion, which is supported by the recovery of logistics. Mobile gaming has experienced a significant growth.
• Many trade exhibitions have been postponed or cancelled. It is recommended that exporters continue to track relevant event websites or email event organisers for updated information. Note:
  • China Food & Drinks Fair (Chengdu Tang Jiu Hui), Chengdu, 21-23 May will proceed
  • SIAL China, postponed from 13-15 May 2020 to 28-30 September at NECC in Shanghai.
• On 26 March, and with immediate effect until notification of expiration, the Civil Aviation Administration of China announced that:
  • Each Chinese airline is only allowed to maintain one route to any specific country with no more than one flight per week
  • Each foreign airline is only allowed to maintain one route to China with no more than one weekly flight.
• Whilst this will impact on standard air freight options, in positive news for air freight, China Southern has begun a schedule (through to 16 April at this stage) that includes up to 15 return ‘freight only’ flights per week using converted passenger aircraft. The services are Guangzhou-Sydney (6 per week), Guangzhou-Melbourne (7 per week) and Shanghai-Sydney (2 per week).
• Sea freight continues to support trade between Australia and China as Chinese port congestion and supply chain disruptions ease. However, shortages of containers and ships is resulting in freight delays.
• Effective from 28 March, the Ministry of Foreign Affairs will suspend entry into China by foreign nationals holding visas or residence permits. Foreign nationals entering China for necessary economic, trade, scientific or technological activities or for emergency humanitarian needs may apply for visas at Chinese embassies or consulates. These measures will be calibrated with the evolving situation and changes announced accordingly.
• Travel restrictions across all regions in China were lifted on 25 March, except for Wuhan, where travel restrictions are proposed to be lifted on 8 April.
• Economic recovery announcements in China include fast-tracking approvals for local businesses to reopen and build production levels; infrastructure spend;  increased liquidity to banks to enable them to defer loan repayments to SMEs;  and incentives to households to encourage spending, such as retail coupons and in some provinces, trialling an optional 2.5 day weekend.

• On air movements:
  • Qantas
    • Suspended all international passenger flights in April and May 2020
    • One cargo flight B767F a week and launching the second one shortly
  • Cathay Pacific
    • From April 2020 operates only to Sydney in Australia three times a week
    • Ramping up of cargo capacity (charter services, certain suspended passenger services purely for airfreight).
  • Air freight cargo is greatly constrained due to reduced passenger flights. Combined with increased demand for medical supplies and perishables increases, air freight rates continue to increase. Visit Airfreight rates continue to rise as capacity crunch goes global 
• On border/people movement:
  • Hong Kong Port, the fifth busiest in the world, remains operating and fully functional 
  • From 25 March (tentatively for 14 days), entry is denied for all non-Hong Kong residents coming from any overseas country by plane
  • Non-Hong Kong residents coming from mainland China, Macau and Taiwan will be denied entry if they have been overseas in the last 14 days
  • All those able to enter Hong Kong (residents or otherwise) will be subject to 14-day compulsory quarantine.
• The revised dates of some trade shows postponed remain unknown. It is recommended that South Australian exporters continue to track relevant event websites or email the event organiser for updated information:
  • Mines & Money Asia (postponed from April 2020 to TBC)
  • Vinexpo 2020 (postponed from May to 8-10 July 2020)
  • Hong Kong Medical and Healthcare Fair (postponed from May to 25-28 July 2020)
  • BioHK 2020 (postponed from Jan to 19-22 August 2020)
  • Asia Fruit Logistica (relocated to Singapore in September 2020)
• Fewer Hong Kong residents are dining out, resulting in increased retail and online shopping for food and ingredients for home cooking and personal daily necessities, as well as health and wellness maintenance products, products essential to virus containment, health and public safety. Online fulfilment is limited, and prices are rising as stocks become limited. There have been major limitations for imported fresh vegetables from Europe.
• New regulations for social distancing have been in place since 29 March 2020 for 14 days with the potential for further extension.
• The regulations will impact on-premise premium food and wine consumption as they prohibit group gatherings of more than four persons (restaurants are limited to four customers per table and 1.5 metres between tables).
• HKSAR Government’s Anti-epidemic Fund has been announced to boost local consumption and revitalise the economy:
  • Cash payout of HKD10,000 per HK permanent residents aged 18+
  • SMEs in all sectors have access to concessionary low-interest loans and loan guarantees by HKSAR Government (total HKD20 billion)
  • Aviation industry has received a HKD1 billion package expecting to benefit 400 companies (airlines, aviation support and associated passenger services, airport retail tenants and restaurants, airport staff)
  • Retail Sector Subsidy Scheme provides one-off subsidy of HKD80,000 for each retail store
  • Construction provided HKD50,000 per company and HKD1,500 per worker.

Key and up to date information on the situation in Japan, including restriction, screening and quarantine measures for travellers is available at Coronavirus (COVID-19) advisory information, Japan

• After earlier stemming infection rates, Japan and particularly Tokyo is experiencing a surge in the number of confirmed COVID-19 cases.
• Tokyo’s semi-lockdown weekends have been implemented and will continue until the situation improves.
• This sees the weekend closure of major department stores, shopping centres, dedicated restaurant buildings etc. Hotels, smaller local restaurants, supermarkets, drug stores and convenience stores may remain open.
• On 31 March the Tokyo Metropolitan Government requested residents to remain home during night-time and especially not to go to bars, night clubs, karaoke.  This will impact consumption.
• Further and broader restrictions are increasingly likely.
• Japan's Foreign Ministry announced on 31 March that foreign nationals from the United States, China and South Korea, and most European countries will be banned from entering the country.
• Reduced air freight and restaurant trade has negatively affected exports of premium agricultural products, especially seafood. The impact of this will spread to other commodities as different products come into season and the outbreak spreads.
• Consumer demand is for daily essential goods, frozen foods, ready-made meals, fresh fruit and vegetables. An increase in online and health food sales provides an opportunity for Australian producers.
• The government is working on an economic stimulus package worth 56 trillion yen (AUD $841 billion) or around 10% of GDP. The package will be Japan’s biggest stimulus package ever.
• Prime Minister Shinzo Abe also hinted at additional measures after the pandemic ends that would be designed to boost industries hit hardest by the pandemic’s repercussions, notably the tourism and restaurant industries.
• The Olympics have been postponed until 23 July to 1 August 2021.

• Malaysia locked down its borders on 18 March, restricting movement of citizens to the end of March and banning all foreign tourists and visitors.
• A Movement Control Order (MCO) is in place in Malaysia which only allows critical industry and selected factories to operate, effective 18 March to 14 April, but likely to be extended:
  • Malaysians are not allowed to leave the country. However, foreigners are allowed to leave
  • Only essential services industries are operating during this period
  • Agricultural/livestock/fisheries/aquaculture activities will continue to operate to ensure food supply and security
  • The Malaysian Retail Association envisages a 90% drop in retail sales due to the MCO
  • E-payment services (e.g. POS terminals, QR code payments, e- commerce payments) will continue and there will be no disruption to e-payment transactions under the MCO
  • Online grocery delivery services are having difficulties fulfilling orders as ‘panic’ buying from online consumers sets in. Supermarkets are focusing on stock replenishment as a first order of business as they respond to a spike in orders
  • Online retailers are also scaling up delivery and logistic capabilities to cater for the large volumes of requests.
• Phase 2 of the MCO began on 1 April, with further restrictions including dawn-to-dusk operating hours of shops and commercial transport.
• The Malaysia Australia Business Council has advised that they will be setting up a ‘Members Support Programme’. This will include a members’ promotional section on the MABC website and informing members and guests regarding the services and goods that members are still providing during the MCO.
• International mail and parcel services to most countries, including to Australia, have been temporarily suspended from 30 March until further notice. This is due to the broad cancellation of flights internationally. Express mail services are still available to Australia.
• Freight matters for exporters:
  • Air freight prices have soared due to airlines operating at reduced capacity and space is limited, with many exporters facing delays and postponement in shipment.
  • Under the MCO, the Ministry of Transport has confirmed the following:
    • Processing of shipment of products to/from overseas market allowed as logistics services in Malaysia are in operation as usual during the MCO period
    • Oil and gas, petrochemicals, chemical and chemical products as well as electrical and electronics products have been included in the list of products exempted from MCO
    • All ports in Malaysia will remain in operation (except for cruise ship ports), although delays in clearing cargo from seaports are apparent. The Ministry of Transport has given special exemptions to port authorities to clear non-essential goods in particularly congested ports (Klang, Penang and Johor)
    • Operation of cargo flights, be it to leave or enter the country, are allowed
    • Only lorries carrying essential items and foodstuff are allowed to operate.
• Consumer Patterns: Horticulture produce is in high demand, but with concerns for supply of Australian carrots and washed potatoes. Demand for premium beef is subdued with the hospitality sector operating at a bare minimum and a stable supply of local beef and current stocks satisfying local demand. Dairy demand remains robust with adequate supplies save for logistical issues. 
• For premium groceries, there doesn’t appear to be major issues for availability of shelf stable products.
• High demand exists for vitamins, antibacterial soaps, sanitisers/disinfectants, face masks, thermometers and gloves.
• On 27 March the Government announced a RM250 billion (nearly $100 billion AUD) stimulus package. Highlights include low and middle income worker cash handouts, support for businesses to maintain employees, and loan deferrals and guarantees for larger corporates (following on from earlier deferrals for SMEs and individuals).

• Italy and Spain continue to be the most severely affected country within Europe
• The market has significant restrictions from an air freight perspective due to reduced passenger routes
• Sea freight is beginning to experience challenges due to labour shortages to unload and transport given the wide lockdown measures
• Currently, citizens are unable to leave their homes except to purchase food, medicine or seek medical assistance
• Bricks and mortar retail operations have been suspended due to government restrictions, but online shopping and food is still active
• Supermarkets and other food suppliers in the UK have had a clear boost in sales. It is a different story for non-essential retail however, as consumers reduce spending on non-essential items. This may change as people become used to working from home and income support packages come into play. However, it would be expected that items that could be used in the home would see the greatest upsurge in demand.
• There has been a significant increase in online shopping. Many large retailers have not been able to manage the demand and have temporarily suspended deliveries as a result i.e. Majestic Wines and large supermarkets.
• Consumers in the UK have increased their purchases of alcohol by 22% in the last 12 weeks, with the increase coming solely from off-trade market (supermarkets, convenience stores, liquor outlets), whilst the on-trade market (restaurants, bars) have declined sharply due to social distancing
• It is expected this trend will increase following the closure of pubs, clubs and restaurants
• The Office of the Agent General is currently working with a distributor to design an offer to help meet this growing demand for off-premise wine.
• Importers of food and beverage are working hard to maintain supply to thriving retailers as they replenish stocks. But there has obviously been a significant drop in off-trade orders as a result of venue closures. Some distributors and companies are looking at ways to go direct to consumer.
• All large conferences and trade shows have been cancelled and the majority have been rescheduled for late 2020 or 2021. Some smaller events are moving to an online format
• See this list of European trade fairs/exhibitions and their current status.

More information

• Coronavirus action plan: a guide to what you can expect across the UK
• European Commission Coronavirus response
• Austrade updates for Europe

• On 30 March, President Trump extended the National Social Distancing Executive Order from a guidance finish date of 8 April to 30 April. This means the US will not be open as normal for business from Easter as previously reported.
• The US has various levels of lockdown which is not nationwide, but all 50 states now have reported cases. ‘Shelter-in-Place’ directives are implemented in various degrees at the state and local level.
• Personal travel restrictions do not apply to trade, but trade via air freight is significantly reduced due to the grounding of the majority of trans-Pacific and trans-Atlantic passenger flights.
• Airlines, such as American Airlines and United, propose to pursue freight only services. American Airlines has carried out such a service to Europe already, whilst United is looking to run 40 charter flights weekly, with the intention of adding more routes.
• Whilst early chartered freight has been focused on critical supplies, some opportunities for the transport of perishables may become available.
• At the US seaports, there are restrictions for non-passenger vessels that have travelled from or through China in last 14 days. They can operate in the US as long as there aren’t any sick crew members. US ports are expecting a 20% drop in cargo volume.
• The global outbreak has caused disruptions in the US supply chain. There is a shortage of medical devices and surgical masks. Automotive and technology sectors are heavily reliant on the supply chain from China and are seeing a shortage of parts needed for production. 
• In the food sector, products may be in short supply in coming months, such as specialty cheese and wine from Italy and France.
• The US Chamber of Commerce reports long-term changes in consumer behaviour:
  • Consumers will shop more online, particularly grocery purchases
  • Retailers will look to connect with customers and enhance their online experience
• As result of Americans staying at home during this period, consumer behaviour is moving from the traditional brick-and-mortar business to online consumption. The following sectors have seen increased online activity: Media (+46%); Supermarket (+42%); Retail Healthcare (comprising online pharmacies, vitamin, supplement: +24%); and Telecom (+24%).
• BIO International 2020: Conference is scheduled to take place in June 2020 in San Diego. Monitor website for updates.
• In terms of economic stimulus, President Trump signed a stimulus bill valued at US$2.2 trillion. The bill includes distributing US$1,200 checks to millions of Americans and providing zero-interest loans to small businesses.
• U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labour announced Payroll Tax Credits for small and midsize businesses for coronavirus-related leave for employees.
• If a state is declared an economic disaster area, small businesses, small agricultural coops, and most private non-profit groups can apply for US Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL).
• President Trump is aiming to have the US open for business by Easter.

More information

• US Government Response to Coronavirus, COVID-19 
• White House Coronavirus (COVID-19) Task Force

Make the immediate safety and well-being of your people here and overseas a priority and invest as needed to ensure a safe and healthy working environment. Enable employees to work from home where this is possible. Check in with your overseas and interstate business partners and see how they are doing and how you might be able to support them during this time.

If travel is necessary, make sure you check the most recent DFAT advice via Smart Traveller

Interstate trade

• As announced by the Premier on 22 March, for non-essential travellers entering South Australia after 4pm on 24 March, a 14-day isolation requirement will apply
• Please note that this does not apply to essential travellers, which effectively covers commercial trade – the key requirements are published in Schedule 1 of the Direction of the State Coordinator: Cross Border Travel Direction 2020
• Key points in Schedule 1 for businesses moving goods or needing critical labour are item 4 (transport and freight services) and item 5 (skills critical to maintaining key industries or businesses)
• Exemptions also apply for essential transport including required health personnel and patients needing essential treatment, emergency services workers engaged in this capacity, those resident in communities near to the border and for compassionate grounds
• Whilst border controls are in place, a member of the public who believes they are an ‘essential traveller’, will be asked to justify their status if they are spoken to by police at a checking point or any other place in the state.

Overseas trade

• Shortages in imported and exported goods are mostly going to come from disrupted production rather than freight impediments
• In most areas (but not for some perishables), sea freight will be the beneficiary of reduced air freight capacity due to considerable border closing and flight/route cancellations
• Sea freight, whilst facing some challenges, is largely operating without significant impact
• Shipping Australia has publicly indicated their concerns with Maritime Safety Queensland requirements that exclude cargo ships until 14 days have passed since their last international port stop. The national requirement, as applied in South Australia, is that ships may dock, but crews must not leave the vessel if another international port has been visited inside the 14-day period
• All scheduled international passenger air services into and out of Adelaide Airport have been suspended. Various international services are scheduled to resume in May and June, but suspensions are likely to be extended.
• Only a small component of air freight is transported on dedicated cargo flights, which are usually considerably more expensive (even if available), so many perishable goods exporters will continue to face extreme challenges to export
• Fake documents, claiming to be advice from the Australian Border Force (ABF), have been circulated online, suggesting the ABF has prohibited export of items such as infant formula, toilet paper and various medical/hygiene supplies
• Download the ABF statement that says no goods have been prohibited for export as a result of COVID-19. The ABF provides advice on prohibited goods or those requiring written permission and specific conditions for export.

Business continuity planning

• Be proactive and keep regular communication with in-market staff and ensure they are safe, healthy and supported
• Review your travel policies in line with official advice
• Setup communication plans and systems for working remotely
• Take a strategic look at your 2020 plans, to incorporate the latest market condition changes into your 2020 budget, and rebalance costs and activity based on revised revenue forecasts
• Expect delayed payments from importers and distributors in affected markets
• Monitor your supply chain closely, realign your product offerings, commercial organisation, channel partners and marketing approach to respond to changing market conditions - both now and after the pandemic ends
• Keep an eye on potential opportunities and be ready to move quickly if they emerge. 

Risk management

• Map and prioritise key risks to your business
• Map potential future scenarios and develop an action plan for each scenario
• Update business continuity and emergency plans
• Communicate these plans to employees, customers, suppliers and partners.

Insurance

• Stay actively in touch with your insurance provider
• Review relevant insurance policies to ensure coverage
• Consider the potential impacts of force majeure in relation to your existing contracts
• Prepare the groundwork for possible claims.

Banking

• As the impact of COVID-19 escalates, Australia’s banks are providing various support packages and exemptions
• If your business is facing challenges with cash flow or loan repayment issues, it is imperative that you contact your bank as soon as possible
• The Australian Banking Association advises that Australian banks will now defer loan repayments for six months for businesses with business loan facilities up to $10 million where they have been affected by COVID-19 (this potentially represents up to 98% of all Australian businesses)
• Businesses need only self-assess impact, with no further verification required
• Businesses with loans above $10 million may also be eligible on a case-by-case basis
• Other banking services to assist may include waiving of fees and charges, interest free periods or debt consolidation support.

From a trade and investment perspective, the COVID-19 focus has been on business continuation, including trade impacts and maintaining key trade relationships. 

However, the Federal and State Governments still welcome foreign investment as a vital component in supporting jobs growth both now and in the longer term. 

FIRB changes

Temporary foreign investment changes were announced by the Treasurer on 29 March, with immediate effect.

This effectively temporarily reduces the threshold for requiring Foreign Investment Review Board (FIRB) approval to $0, down from previous levels of:

• $1.192 billion for Free Trade Agreement (FTA) nations
• $275m for non-FTA nations
• $60m in Agribusiness

This change is to allow extra government oversight in the national interest at a time of actual and potentially distressed asset values.

• Risk management and supply chain diversification is being highlighted in this situation. Companies should consider identifying and testing the feasibility of sourcing vital components from other suppliers and minimise over-reliance on a single source 
• Business continuity is the priority in the immediate term, and this will depend on maintaining close communication with supply chain and logistics partners to understand their issues.

• Virtual meetings – keeping contact through available internet conferencing with clients and distributors
• Videoconferencing and teleconferencing through Austrade – speak to a TradeStart Adviser
• Company websites can always be improved to engage better with overseas clients or potential new clients
• Over the medium term, consider exploring e-Commerce platform 
• Podcasts can provide a lot of information in a short space of time.

• Early export sector impacts of the COVID-19 were related to effects in China, and had immediate effects on wine and live food exports (including seafood), tourism, and international education sectors. As the pandemic becomes a global phenomenon the impacts on SA exporters will change, and will be monitored closely.

• Study in Australia and its partners are keeping international students informed as the coronavirus situation changes. Detailed information regarding Health, Travel and Visas, and Education Departments and Regulators is available at StudyinAustralia 
• In South Australia StudyAdelaide is monitoring the coronavirus and international education. Visit updated information for international students 
• Austrade is providing weekly updates on the international student market as a result of COVID-19, along with general news for international education partners.
• The Department of Education Skills and Employment is coordinating information and monitoring the coronavirus situation in relation to international education. Visit DESE coronavirus (COVID-19) 
• The South Australian Department for Education publishes regular coronavirus updates as they relate to public schools. Visit SADE updates

• Department of Agriculture, Water and the Environment is closely monitoring the border measures of trading partners and what impacts these may have on trade, in particular air freight due to reduced commercial flights. This will significantly impact fresh produce and daigou trade. They are also working closely with industry to facilitate information on alternative markers, understand the impacts, and to consider response and recovery efforts.
• High valued premium products continue to be significantly impacted by reduced global consumer demand and the closure of restaurants. While these impacts are being felt by certain industries (e.g. seafood), produce is still being traded but at reduced volumes.
• In China a small number of seafood orders have started to come through and are being filled quickly.  
• Restaurant, hospitality, transport disruptions and travel restrictions in China and other markets are affecting the demand for high value fresh food and wine.
• South Australian exporters should closely observe the ongoing flight restrictions and investigate alternative transportation routes for fresh produce/limited shelf life products
• Note: The Australian Government announcement of the International Freight Assistance Mechanism – see press release and fact sheet. 
• We strongly encourage South Australian exporters seeking to move goods via air freight (predominantly perishables) to make contact:
• Telephone: (02) 6272 2444; Website and dedicated enquiry form: https://haveyoursay.agriculture.gov.au/international-freight-assistance
• Travel disruptions are also negatively impacting on trade exhibitions, companies’ ability to service their markets, and business partners’ planned travels to visit Australia.
• Whilst the source of the covid-19 outbreak is still being investigated, it is clear transmission through food is unlikely and there is no evidence of this occurring to date.
• PIRSA is working closely with the southern rock lobster industry to assess management options to mitigate industry export impacts.
• Food Standards Australia New Zealand for advice and answers to questions, such as:
  • Can the virus be transmitted through food?
  • How do I prevent people in my business transmitting the virus?
  • Is soap and water enough for washing hands?
  • How do I properly clean and sanitise my equipment and facilities?
  • What if someone in my business is unwell?
• Dealing with staff who are ill, waiting for a test result or tested positive?

More information

• COVID-19 and your Workforce - Guidelines for Industry (Food South Australia)
• Coronavirus - Information for industry (Food South Australia) 
• Food businesses and COVID-19
• Australian Grape and Wine Association 
• Wine Australia 

• The South Australian Tourism Commission (SATC) and Tourism Australia are each providing information on COVID-19 and its impact on the tourism industry and relevant supports available.

More information

• SATC - Coronavirus - Industry Support
• Tourism Australia – Assistance for the Tourism Industry and weekly webinars.