Irish food exporters hit by spiralling cost of shipping to China

Bord Bia says refrigerated container prices nearly doubled to over €5,000

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Sean Pollock Email

February 14 2021 02:30 AM

Irish food exporters have been hit with a fresh blow as surging freight costs, container shortages and consumer concerns over Covid-19 affect trade with China.

Several food exporters had seen the Chinese and Asian markets as an opportunity to recoup some sales lost following Brexit.

However, recent developments with transport costs to China for food exporters have hit margins, creating competitiveness issues.

Bord Bia, the State agency for supporting and promoting Irish food at home and abroad, told the Sunday Independent a current shortage of containers was affecting Irish food exporters.

It said costs had almost doubled for European suppliers to China, with the price of reefer containers (refrigerated containers) now being over €5,000.

Conor O'Sullivan, the China manager for Bord Bia, was recently quoted as saying the logistics of shipping to Asia had been a big challenge for Irish seafood exporters over the past year.

Bord Bia's spokeswoman said: "Increased shipping costs to China continue to be an issue for exporters all across Europe, including Irish seafood exporters. Like any business, an increased cost reduces margins and profitability.

"This is particularly challenging at a time when prices are already under pressure due to the impact of Covid-19, and most notably for Irish seafood, the closure of the foodservice sector across many markets in Asia."

According to Bord Bia's recent Export Performance and Prospects report, the value of seafood exports to China fell by 67pc in 2020 to €15m.

The Bord Bia spokeswoman added the shipping situation to China is "very consistent across all commodities". "Containers have been in short supply and slow to return to Europe and Ireland," she said.

Despite concerns over exports, Bord Bia said it believes demand from China for beef and pigmeat would remain strong.

Separately, shipping line DFDS, which operates the Rosslare to Dunkirk service, said the Brexit transition had "caused more than just teething issues". In its quarter four results presentation for 2020, it said the logistics business had been hit by slower transit times, with increased empty runs and more equipment needs raising costs.

DFDS added there had been a high demand for its Ireland to France route. Its long-term viability will be confirmed as "border crossings normalise".