How worried should exporting businesses be by Coronavirus?

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Coronavirus has already had a huge effect on businesses worldwide and is starting to infect the working norms of UK firms too. 

On the day that the Bank of England dropped the base rate back to a historic low and The Budget included measures including covering the cost of sick-pay for small businesses, many large businesses including Google and offices within The City have already told staff to work from home whilst Italy is on almost full lockdown. 

For exporting businesses, self-isolation could affect more than productivity. Coronavirus threatens supply chains and international sales. And nowhere has that been more profound so far than in China. 

The Financial Times reported that China exports have plummeted by 17% in the first two months of the year as Coronavirus takes its toll, disrupting global supply chains, blocking transport, movement and dampening business activity. 

Elsewhere, food and pharma exporters are reporting anxiety regarding the global picture. In India, Coronavirus has contributed to a 15% decline in meat exports, whilst a falling global demand for rice and restrictions on the outbound shipments of medicine have confounded things. In fact, it’s thought that India’s trade with China has been hit to the tune of $12 billion so far.

The Institute of Export & International Trade published potential issues affecting supply chains last month, highlighting the importance of a clear overseas strategy without over-reliance on one market. The body noted the impact that SARS had on the global economy two decades ago, warning that China’s growth since then could see Coronavirus have a bigger impact. 

In terms of transporting goods, airfreight and shipping are both being impacted with the International Chamber of Shipping advising new measures to its members. 

Kitack Lim, secretary-general of The International Maritime Organisation said last week that: “With no vaccine currently available to tackle the Coronavirus, all industries and governments must take appropriate steps to contain the spread. 

“Shipping is responsible for 90% of global trade and recognises its responsibility in helping tackle this global health issue whilst ensuring that the wheels of global trade continue to turn.” 

Read their latest guidance document for the shipping industry here.

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