*Updated 8 April 2020

Austrade is open for business and our network of 1,100 staff is committed to helping you through this time.

As part of ‘Team Australia’, Austrade is working closely with the network of government departments and industry agencies to help Australian businesses overcome complex and fast-evolving COVID-19–related challenges.

This site provides updates on markets and logistics, and links through to the Government’s extensive business support programs.

Support for businesses impacted by Coronavirus

On 1 April, the Australian Government announced measures to help secure freight access for Australian agriculture and fisheries exporters.

The new $110 million International Freight Assistance Mechanism will assist Australia’s agricultural and fisheries sector by helping them export their high-quality produce into key overseas markets, with return flights bringing back vital medical supplies, medicines and equipment.

Exporters wishing to access the mechanism can register their interest or call the Department of Agriculture, Water and the Environment on (02) 6272 2444.

On 1 April, the Government also announced increased funding for the Export Market Development Grant (EMDG). Funding for the scheme will increase by $49.8 million in the 2019-20 financial year, allowing exporters and tourism businesses to get additional reimbursements for costs incurred in marketing their products and services around the world.

This supplements the additional $60 million already committed by the Government, and brings EMDG funding to its highest level in more than 20 years at $207.7 million for the 2019-20 financial year.

For details about the full range of programs the Australian Government has launched in support for Australian businesses go to business.gov.au

Latest insights from Austrade

China update

8 April 2020

Ports, aviation, transport and logistics

  • There are now only 108 international passenger flights into China per week under new restrictions to minimise the risk of COVID-19 cases entering the country.
  • The number of weekly international cargo flights has increased to 1,195 (up 28.5% in the past week and 17.85% compared to pre-COVID-19 levels).
  • The Civil Aviation Administration of China (CAAC) is encouraging passenger airlines to use their aircraft for freight-only flights. In the past week, CACC has approved 102 freight-only flights on existing passenger routes – including daily flights to Australia by China Southern from Guangzhou and China Eastern from Shanghai.
  • The Ministry of Transport has issued stricter guidelines for international cargo ships after five crew members of the super-freighter Gjertrud Maersk tested positive for COVID-19. Crew will now not be allowed to disembark from their ships unless the Ministry gives them prior approval. Currently, around 500 ships carrying 7,000 crew arrive in China’s 128 ports daily.
  • Rail transportation is being used as an alternative to air and sea freight, particularly out of Europe. China National Railway Group reported that the ‘China Railway Express’ is maintaining freight connections between China and European countries.

E-commerce

  • Alibaba’s e-commerce platform Taobao is expanding its direct-to-customer selling platform for bargain-seeking consumers due to competition with other platforms such as Pinduoduo.
  • Taobao’s new Taobao Special Offer Edition app allows buyers to purchase unbranded items like electronics and home appliances directly from manufacturers. The app was the most downloaded free app on Apple’s China App Store following its release.
  • In response to store closures worldwide, more of the world’s luxury brands are establishing shops on China’s e-commerce platform TMALL for specific categories and labels.
  • The skincare and beauty sector is expected to rebound quickly. Many brands are focusing on ‘health’ and ‘wellbeing’ as their core message, and on products that suggest a healthy lifestyle, with beauty a part of that lifestyle. Strong anecdotal evidence suggests the growth in online sales will continue. In 2019, online sales accounted for 30% of sales by value for skincare and 38% for colour cosmetics. Last year, the value of China’s beauty, wellbeing and personal care sector was estimated at around US$66 billion.

New infrastructure and technology

  • China’s COVID-19 stimulus spending on infrastructure is projected to be around RMB 3.5 trillion in 2020 (around 3.5% of GDP). Investment has previously been in transport networks (high-speed rail and roads), power production and industrial capacity.
  • New infrastructure investment will focus on 5G, ultra-high-voltage cables, intercity high-speed railway, electric vehicle charging stations, big data centres, artificial intelligence and the Internet of Things (IoT).
  • China’s Academy of Information and Communications Technology (CAICT) forecasts that 5G infrastructure investment will reach RMB 1.2 trillion over the next five years. More than 50% of the world’s 5G base stations are in China, and CAICT forecasts 600,000 more stations will be built by the end of 2020.
  • China’s State Grid will invest more than RMB 400 billion in power grid construction for ultra-high-voltage grids (UHV) and interprovincial electricity projects. Five UHV alternating current projects will commence between March and December 2020.
  • The central government will continue to enhance investment into strategic and significant infrastructure projects. This includes constructing and expanding the intercity rail network to link metropolitan areas to remote regions, bringing higher levels of economic development to those areas and benefitting regional commuters.
  • The new intercity rail network is expected to test IoT-driven technologies, including automated vehicles, new battery and energy storage, and artificial intelligence.

Agriculture and food

  • Local importers and distributors estimate that Australian seafood imports were around 10–20% of 2019 volumes in January/February 2020. There has been some growth from mid-March due to stock depletion and the gradual recovery of restaurant and in-house dining. Other countries (Canada, New Zealand, US) all report low volumes of exports due to soft demand, with logistical challenges for live product.
  • During the pandemic, some dairy suppliers saw strong demand, although dairy exporters had to adapt their logistics business model, due to reduced capacity and higher airfreight costs.
  • Demand for wine remains very soft, especially at the premium end. Wine suppliers estimate consumption for Q1 2020 is at 30% of normal levels, although the consumption rate is slowly recovering. Current sales are estimated to be around 25% of normal levels for bars, 50% for hotels and restaurants and 75% for direct premises, such as supermarkets. There has been growth in e-commerce channels. 
  • According to the Department of Agriculture, Water and the Environment, around 56,000 tons of beef were exported in the first three months of 2020, compared with nearly 52,000 tons for the same period last year – a 7.7% increase by volume.
  • Just over 26,000 tons of sheep meat were exported to China in Q1 2020, a 17% decrease by volume compared with 31,000 tons for the same period last year.

Health

  • According to China’s Ministry of Commerce, as of 4 April 2020, 54 countries and three international organisations have signed medical and PPE procurement contracts with Chinese enterprises. More agreements are expected to be signed with another 74 nations and 10 international organisations in the near future. 

Europe update

9 April 2020

Summary

Most European Governments anticipate sharp economic contractions, although economists in Germany forecast a rapid economic bounce-back next year. Some EU countries badly affected by COVID-19 are calling for new EU-backed debt instruments, and proposals are now the subject of intense negotiation. In UK and Germany in particular, the pandemic has triggered widespread innovation in medical equipment development.

General news

  • European Union EU finance ministers are debating whether to create new EU-backed credit facilities to aid economies that have been particularly hard hit by the COVID-19 pandemic.
  • France – Minister of Economy Bruno Le Maire declared France would enter its worst recession since 1945 due to the COVID-19 pandemic. He told a Senate Commission that France’s economy may shrink by ‘much more than’ 2.9% in 2020.
  • Germany – The ifo Institute predicts that Europe’s biggest economy would contract by 4.2% this year before expanding by 5.8% next year.
  • Israel – The Israeli Government has announced more stringent lockdown protocols in eight cities and 15 neighbourhoods in Jerusalem where populations are most concentrated.
  • Italy – The Italian Government has proposed closer collaboration between technology, research and innovation organisations to fight COVID-19 more effectively. Called ‘Innova per l’Italia’, the initiative targets businesses, universities and research centres among others. The aim: to enhance the prevention, diagnosis, monitoring and containment of COVID-19 infections.
  • Poland – The EU’s major copper producer, KGHM, reports that to date production has not been impacted by responses to the pandemic.
  • Sweden – Swedish company Mölnlycke has raised the issue of France’s export ban on key medical supplies. Mölnlycke’s main distribution warehouse for southern Europe is in Lyon and the company’s entire stock of four million surgical masks has been seized. This is impacting the company’s ability to supply medical equipment across Europe.
  • UK – The UK’s export credit guarantee agency, UK Export Finance, will expand the scope of its Export Insurance Policy to cover transactions with the EU, Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland and the US with immediate effect.
  • UK – The Government is considering ‘immunity passports’ for key workers as a way of getting people who have had COVID-19 back into the workforce more quickly. The principal challenge is administrative. The idea of post-recovery certificates is also under consideration in Germany. 

Health manufacturing

  • Germany– The FIT Additive Manufacturing Group has developed a ‘filter holder’ that can be combined with almost any filter material to form a makeshift, multi-use mask. The 3D printable blueprint can be downloaded free of charge from the company’s website. FIT Group invested last year in two 3D printers from Australian company SPEE3D.
  • Germany – Mondi’s plant in Gronau, which usually produces hygiene products such as baby diapers, has converted its production line to manufacture soft, elastic straps for clinical masks. 
  • Sweden – H&M has repurposed parts of its supply chain to produce personal protective equipment for hospitals. 
  • UK – There is mutual official interest in increasing UK–Australia collaboration with respect to the provision of personal protection equipment.

Retail

  • Sweden – Sales at H&M, the world’s second-largest clothing retailer, decreased by 46% during March. The company has closed stores across its global network until further notice, although stores in China have largely reopened. The closures include 49 stores in Australia, affecting 1,300 people. H&M still plans to launch an online shopping portal in Australia later this year.
  • UK – There has been a 45% increase in sales year-on-year at convenience stores in the four weeks to 22 March. Supermarket sales grew just 7.6%.
  • UK Major UK department store chain, Debenhams, and retailer Cath Kidston are lining up administrators, with over 23,000 jobs at risk.

E-commerce

  • Germany – E-commerce sales in March were almost 20% below last year. In the clothing segment, sales slumped by more than 35%. Consumer electronics sales dropped by over 20%, and computers and accessories saw a 22% drop despite spending on home office solutions. Online bookings for travel, events and flight tickets fell more than 75%.
  • Germany – Online demand for medicines rose by more than 88% and food orders by 55% in March (year on year). For drugstores, the increase was just under 30%.
  • UK – Over 400,000 people are receiving prescriptions via online pharmacy, Pharmacy2U. The fastest-growing customer segment is among the 70+ age group.

Agriculture and food

  • Germany – The German Government will relax border closures to allow seasonal harvest workers to enter the country. German farmers usually depend on around 300,000 seasonal workers each year to bring in the harvest.
  • Israel – The number of eggs purchased jumped from 6 million a day to 10 million a day during the COVID-19 crisis. The country is aiming to import up to 28 million eggs (by ship and air) from Spain and Turkey to address the shortage.
  • Netherlands – Dutch farmers have been left with one million tonnes of potatoes from last season. With restaurants closed since mid-March, the market for potatoes collapsed overnight.
  • UK The Horticulture Trade Association warned plants worth ₤200 million would have to be destroyed and a third of horticultural businesses might not survive the current crisis. The horticultural industry contributes more than ₤20 billion to the UK economy each year.

Energy and resources

  • Poland – Famur, Poland’s largest mining equipment manufacturer, reports that its activities have not been significantly disrupted as a result of the COVID-19 pandemic.
  • Poland – A sharp drop in production among coal power plants is affecting domestic producers of steam coal.

Digital technologies

  • Germany – There is an emerging political consensus that Singapore’s smartphone tracking approach may be politically viable without compromising legal and cultural barriers in Germany. Tracking of close-proximity Bluetooth ‘handshakes’ between smartphones would be the answer.
  • Germany – The Fraunhofer Institute for Telecoms said it was working with others across Europe to develop a COVID-19 contact-tracing app. The app would enable the proximity and duration of contact between people to be saved for two weeks on cell phones anonymously and without the use of location data.
  • Italy – Italian fintechs have launched support mechanisms to address the COVID-19 crisis. These include crowdfunding campaigns for the Civil Protection Authority to support crisis management, fundraising for intensive care units, collecting and distributing donations for hospitals, and providing free messaging services for the health system.
  • Israel – There has been a general slowdown in funding for seed-stage companies, according to the Israel Venture Capital Association. Investors seem to be focusing on larger companies with later stage rounds.
  • UK More than 500,000 people have signed up with edtech firm Seneca in the past two weeks, more than doubling its weekly active users to 1.4 million.

Infrastructure

  • Czech Republic – The tender submission deadline for constructing the Pankrac and Olbrachtova underground stations and connecting tunnel has been postponed by two months. The tender remains open and the value of the project is estimated to be 10.8 billion CZK.

Advanced manufacturing and defence

  • UK – Jaguar Land Rover, UK’s largest vehicle producer, told staff and suppliers it will extend its shutdown by ‘a few more weeks’. The shutdown is estimated to be costing the carmaker ₤1 billion a month.

Government stimulus program

  • France – Since its inception, the system of loan guarantees set up by the French Government has covered more than €20 billion of loans submitted by 100,000 companies. This represents 6.7% of the €300 billion of guarantees promised by the government.
  • UK – Government body, Innovate UK, is providing £20 million for proposals that will help retailers respond to spikes in consumer demand and improve deliveries, as well as help families assist elderly relatives with food deliveries, doctor’s appointments, bill payments and new home-based education tools.

South Asia update

6 April 2020

India implemented a 21-day lockdown from 25 March. All non-essential businesses, retail outlets and government offices are shut, all domestic and international airlines have been grounded, and interstate bus and train services stopped. The population’s movement has also been restricted. Thousands of migrant workers are still trying to return to their hometowns.

Sri Lanka has declared an island-wide curfew and suspended its visa on arrival facility. Transit passengers are only allowed in Sri Lanka for six hours. Bangladesh has also imposed a nationwide lockdown with all domestic flights suspended.

Economic impacts

  • India’s economy is poised to shrink next quarter and full-year growth is set to suffer markedly.
  • India is likely to see GDP contraction for the first time in two decades due to a halt in non-essential consumption. Full year GDP growth is forecast at 2.1%, down from 5–6% six weeks ago.
  • The biggest impact is projected to be on private consumption, which accounts for 57% of India's GDP. This is fuelled by all non-essential consumption dropping to zero for three weeks.
  • More than one-quarter of India’s 69 million micro, small and medium enterprises may shut if the lockdown extends beyond four to eight weeks, as a majority of them will have cash flow issues.

Industry impacts

Education

  • India’s University Grants Commission is recognising higher education institutions that offer online programs. This could be an opportunity for Australian providers to engage Indian students through partner institutions and to commercialise the Australian curriculum.
  • The Ministry of Human Resource Development has asked schools and higher education institutions to draft an alternate academic calendar for 2020–21. The change in the academic calendar may have an impact on higher education applications to Australian universities in 2021.
  • India has moved to virtual and digital delivery with international schools, agents and institutions re-gearing to deliver remotely. All exams have been postponed.
  • Several online learning platforms are offering their services to a wider audience. Toppr made its services free for use for some time. Global platforms such as Coursera and edX also gave free access to their courses.
  • Bangladesh has closed all academic institutions until 9 April.
  • Sri Lanka closed schools and universities for five weeks from 12 March to 20 April.

Food and beverage

  • Food and grocery supply chains have been significantly impacted. This includes e-commerce platforms such as Amazon as delivery staff were not allowed to operate.
  • After industry and government interaction, supplies to mom-and-pop stores, modern retail and e-commerce supply chains are being restored across India. E-commerce supply chains have started opening and full services covering essential goods in the next week.
  • However, there are significant concerns about food security and the logistics supply chain if lockdowns continue and farmers cannot access markets in major centres. Civil conflict arising from food insecurity is another concern.

Resources and energy

  • The mining, power and metals sectors are less affected than other industries, with many units continuing operations, albeit below normal levels.
  • Public sector steelmakers are operating at capacity. Private companies (Jindal Steel W, AMNS) are scaling down production, both to support containment and to mitigate stock build-up as the automotive, industrial and construction sectors lock down, shrinking demand for steel.
  • Large steel producers, who produce around half of India’s steel, cannot have sudden blast furnace shutdowns as there would be significant wastage, damage and downtime costs. However, smaller producers are substantially cutting back or halting production.
  • Iron ore, manganese, chromite, limestone and dolomite mines are operating within constraints, although output is reduced, especially for the smaller, less mechanised mines.
  • All major copper units and one major zinc producer have shut mining and production operations. One major aluminium PSU maintains operations, while other major private players have substantially cut back or shut down.
  • For the first time, the Indian Government has issued a directive to state-level, local and police representatives to treat green energy plants as “essential services”.

Services and technology

  • The Indian IT sector has moved nearly two-thirds of its 4.3 million workforce to work from home (WFH). The $150 billion industry that primarily services overseas clients is allowing these workers to build software and maintain them for clients from remote locations.

Health

  • Indian molecular diagnostics company, Mylab Discovery Solutions, has developed the first ‘made in India’ COVID-19 testing kit. Its Mylab PathoDetect COVID-19 Qualitative PCR kit screens and detects the infection within 2.5 hours, compared to 7+ hours taken by current protocols.
  • Indian conglomerate Mahindra & Mahindra, in partnership with two public sector units, is working with a manufacturer of high-spec ventilators to help simplify design and scale up capacity to produce devices for $150 as compared to $10,000–$20,000.
  • Small Industries Development Bank of India will provide loans up to $100,000 to micro and small enterprises that are manufacturing COVID-19 medical supplies.

Infrastructure

  • The COVID-19 outbreak has caused severe disruptions to demand and supply in the Indian infrastructure sector.
  • The lockdown is likely to have a major impact as the labour-intensive sector relies on contractual workers (who are mostly migrants). Even materials supply will take time to ramp up.
  • The government’s changing priorities may also affect infrastructure investment.

Supply chain and logistics

  • India’s logistics sector is in disarray because of disruptions caused by the nationwide lockdown. Across the country, the lockdown has resulted in labour shortages, which in turn has added to the limited availability of transportation facilities.
  • The shutdown of non-essential businesses coupled with the lack of mobility for workers means the entire domestic manufacturing supply chain has come to a halt.
  • India has asked countries with which it has free trade agreements to allow goods to be imported without a certificate of origin for the time being, as domestic authorities are not able to issue the document during the lockdown.
  • Packaged food companies have been forced to cut production due to a lack of available workers. In towns where factories are still running, the workforce has been cut by half. Not only are many manufacturers are facing raw material shortages due to supply chain disturbances, they are also finding it hard to deliver finished products to retail stores due to restricted truck movements.
  • The movement of cargo is severely impacted with several ports invoking force majeure.

Consumer behaviour

  • Fearing lockdowns, product shortages and soaring prices, Indian consumers have stockpiled food, medicines and toiletries, leading to empty shelves.
  • The Indian Government has set up a control room to monitor the transportation and delivery of essential goods. It is also working with state governments to coordinate the movement of produce from farms to markets, and the movement of trucks carrying essentials and raw materials.

Government response

  • India has announced a A$38 billion stimulus package, focused on alleviating impacts on India’s poorer populations. The package will provide food, cooking gas and cash payments, as well as make loans and medical insurance more accessible.
  • India is close to finalising a second economic relief package that may include tax concessions for industry sectors hit hard by the COVID-19 outbreak, particularly micro, small and medium enterprises, services and exports.
  • The government has also initiated talks with the World Bank for a package to speed up the creation of healthcare infrastructure that is urgently needed.

ASEAN update

9 April 2020

Markets in Southeast Asia face severe disruption as government restrictions impact supply chains and freight charges rise. Across the region, logistics operations are having to adapt fast. Food security measures are being introduced in some countries, including Vietnam and the Philippines.

Economic impacts

  • Indonesia – The Jakarta regional government has announced legally enforceable large-scale social distancing measures from 10 April. This includes closing most public facilities and houses of worship, prohibiting wedding receptions and other social events, and introducing new limits on operations of office buildings and public transport. Most physical business activities other than working from home are limited, except for those in public governance, those directly addressing COVID-19 needs, and those in specific sectors. The sectors permitted to continue are health, food, energy, communications, finance, logistics, retail, and strategic industries.
  • Indonesia – President Widodo’s government is focused on preventing unemployment and poverty from increasing. The government has lifted Indonesia’s longstanding legal cap on its fiscal deficit to increase expenditure, and has announced a third stimulus package which focuses on social transfers for the poor.
  • Malaysia –The Malaysian Health Ministry (MOH) promulgated the Movement Control Order (MCO) on 18 March initially for a two-week period, which was subsequently extended. On 4 April, MOH announced it would review the need for a second extension on 10 April and there is a strong likelihood of extension. The Malaysian Government has launched three stimulus packages valued at MYR 35 billion (approximately A$13 billion).
  • Philippines – The regional economic think tank Asean+3 Macroeconomic and Research Office has cut its 2020 growth forecast for the Philippines from the predicted 6.2% to 4.5%. The COVID-19 pandemic is impacting the key pillars of the economy: domestic consumption (driven down by community quarantine restrictions in place since 14 March and now extended till the end of April, and rising unemployment); remittances from overseas Filipino workers; the Business Process Outsourcing industry (which has largely shifted to working from home); and tourism. The Government passed a bill to provide cash aid to 18 million low-income families. The private sector is pushing for an easing of restrictions at the end of April to kick-start the economy.
  • Thailand – The Bank of Thailand is forecasting the economy will shrink by more than 5% this year. Most companies are grappling with issues related to supply chain, staffing and liquidity. As an exporting nation, the global economic downturn is also expected to affect many industries. With tourism contributing more than 12% of GDP and around 15% of employment, the decline in this sector in particular will have a major impact. The Thai Government has introduced stimulus packages to alleviate pressure on business liquidity and employee incomes. The Bank of Thailand has also instructed financial institutions to ensure uninterrupted services to minimise disruption to industry.
  • Myanmar – The World Bank has forecast economic growth will decrease from 6.8% to 2–3% in 2019–20. The Myanmar Government has announced an initial stimulus package, including 100 billion kyats (nearly US$70 million) worth of loans, eased deadlines for tax payments, and provided tax exemptions for Myanmar-owned businesses that have been hit by the global pandemic.
  • Singapore – The Singaporean economy is expected to enter a recession this year, with GDP growth projected at −4% to −1%. As a result, the Monetary Authority of Singapore has relaxed its exchange rate policy process to keep prices relatively stable in order to ease the impact on the economy. The Singapore Government has released a third economic stimulus package worth S$5.1 billion, bringing the total value of packages to date to S$60.1 billion.
  • Vietnam –Vietnamese businesses, especially those in the manufacturing sector, are experiencing a slowdown or stop in production, largely due to a lack of raw materials from China. The Government has targeted economic growth of 6.8% for 2020 but has warned that if disruptions to supply chains continue, growth could slow to 5.96%. The Government’s economic stimulus measures include tax breaks, delaying tax payments, and land-use fees for businesses.

Industry impacts

Agribusiness and food

  • Indonesia – Demand forbasic foods is strong and supply chains are responding, but the food service and Bali tourism sectors have experienced steep declines. Some specific fresh produce including onions have become scarce on local supermarket shelves. Indonesia’s Minister for Trade has announced that onion and garlic imports will be allowed without any import licences or a ministerial recommendation to import. This is in sharp contrast to normally restrictive permitting processes for horticultural imports. Some retailers are trimming product ranges to focus on the basics.
  • Malaysia – Demand for basic foods remains strong in the retail sector and significant efforts to shore up supply are being put in place. Significant price hikes and a reduction in the availability of airfreight has importers resorting to sea freight for some commodities. While this is a stop-gap option for some items, the supply of perishable products, such as fresh produce, that require airfreight are being significantly disrupted. There are adequate supplies of dairy, and demand for premium Australian beef is strong in the retail sector but low overall due to the food service channel being reduced. Long transit times are challenging stable supply.
  • Philippines – Demand for agrifood, especially fresh produce, remains high. Leading retailer Rustan’s increased its overall fresh (produce, meat) category sales by 57% since the lockdown and e-commerce sales are on the rise. Rising unemployment could reduce purchasing power. It is still possible to import using sea freight but there have been considerable delays. Airfreight is largely through chartered flights, at three to four times the normal costs.
  • Singapore – Higher airfreight costs are impacting the price competitiveness of Australian food produce in the market. However, Singapore’s focus on food security is opening new opportunities for Australian exporters. The Singapore Food Authority will now allow AA-stamped frozen poultry to be imported into Singapore, with immediate effect until 31 July 2020.
  • Thailand – Supermarkets report stronger-than-usual retail sales, with many Thais opting to cook and eat at home, and stock up on staples. Australian products are selling well via supermarkets and through online channels. In contrast, the food service sector has been hit hard. Significant reductions in tourist numbers has led to the closure of many hotels. Most restaurants have closed, and those that remain open can only provide takeaway service. Some traditional food service suppliers have switched to providing direct-to-home delivery services of products including Australian beef.
  • Vietnam – There is a decline in the quantity of imported food products including Australian agrifood products. The Vietnamese Customs authority temporarily cancelled registrations for clearance of rice-export shipments from 24 March. Pending review, this may limit or end rice exports from Vietnam, the world’s third-largest rice exporter.

E-commerce

  • Malaysia – Online retailers are scaling up delivery and logistics capabilities to cater for a large increase in demand. Key grocery delivery players experienced a surge in demand in late March. The online stores of supermarket chain Jaya Grocer and delivery service HappyFresh reported a jump in activity of around 600% compared to the first half of March. E-commerce and logistics are restricted to the provision of essential services only. Cross-border logistics are not affected with ship fulfilments running as usual. However, the Movement Control Order is impacting final in-market delivery.
  • Philippines – With the closure of most food-service outlets (restaurants and hotels), importers and distributors have started facilitating direct-to-consumer orders via online channels.
  • Thailand – There has been significant growth in e-commerce sales with Thailand’s e-Commerce Association reporting an almost doubling in online sales, particularly in healthcare-related products. The Thai Government is encouraging retail businesses to go online to capitalise on the popularity of social commerce and the country’s strong logistics infrastructure. Food delivery companies have also seen a healthy growth in demand.

Logistics: Air

  • ASEAN – The cancellation of most commercial passenger airlines is impacting international supply chains for premium foods. Besides Australian premium produce, such as beef, this is impacting time-sensitive and premium food imports from Europe.
  • Malaysia – Malaysian customers and importers have had to secure alternative supply routes which may be less time and cost-efficient. This is placing upward pressure on goods prices. Food importers are reverting to sea freight as a more reliable alternative to air freight where possible; however, this is causing significant challenges for time-sensitive perishable items.
  • Philippines – There is no available cargo through Qantas and Cebu Pacific. While Philippine Airlines still offers cargo between Sydney and Manila, prices have increased. Dairy (yoghurt and cheese) and fresh vegetables are the most affected items and inventory in-market is running low.
  • Singapore – Singapore Airlines published its pared-back international passenger flight schedule for April, noting that flights to Sydney would carry both passengers and cargo. Singapore Airlines Cargo has confirmed the regular weekly schedule of six airfreight services to Melbourne and Sydney would continue. Singapore Airlines’ subsidiary Scoot has also resumed flights to Perth as of 3 April. These flights will carry both passengers and cargo. Sea freight connectivity is under further consideration.
  • Thailand – With few airlines operating in the region, and the full closure of Suvarnabhumi Airport from 3–18 April (with the exception of freight and cargo flights), importers are diverting orders to sea containers or securing limited freight services at higher cost.
  • Vietnam – There are currently no direct flights between Vietnam and Australia, meaning exporters have to identify alternative supply routes.

Logistics: Sea

  • ASEAN – Border closure announcements and travel bans have triggered increased concern among importers and distributors about the availability of supplies from Australia — food products in particular.
  • Malaysia –The MCO has restricted depot operating hours from 8am–8 pm, significantly slowing down sea freight shipments. However, the government is working to reduce these delays. As depot operations constitute a crucial element of haulage operations, early closure will have a significant impact on delivery and collection.
  • Philippines – Import permits are being delayed as issuers struggle with reduced workforces and restricted hours at government agencies such as the Bureau of Customs. Sea freight remains the main option for imports.
  • Vietnam – Some manufacturers have noted that sea freight (while still open and moving) is becoming tighter to book due to the flow on effects of less air freight options.

Logistics: Road

  • Malaysia – Logistic services (including transport and warehousing services) were gazetted as an essential service by the National Security Council, but operations are challenged by variations in enforcement.
  • Philippines – Domestic land, air and road transportation is banned unless delivering essential items (food and medicine). Due to a lack of workers and the establishment of checkpoints, some importers have stopped distribution to other provinces or areas outside Metro Manila. Delivery or courier services such as GrabDelivery or Lalamove are still operating.
  • Thailand – Freight companies servicing some manufacturers and retailers are seeing strong demand for their services. Suppliers to malls and restaurants have seen a decline in their business. Trucks from most parts of Thailand are allowed to enter Bangkok 24 hours a day. With around-the-clock transportation, analysts report sufficient stock in the supply chain network to meet metropolitan needs. While many provincial borders are locked down, there have been no reports of this impacting on the movement of essential goods.

Retail

  • Indonesia – Jakarta’s local government has ordered cinemas, sporting venues and other entertainment zones to close for at least two weeks. Banks have closed some branches in central Jakarta and businesses are starting to close as customers stay home. Most large shopping malls in Jakarta have reduced hours of operation, and some have temporarily closed. A large number of restaurants have also closed indefinitely. Traditional markets in Surabaya have reported a decrease in shopper numbers and the worst trading conditions in over 20 years.
  • Malaysia – The MCO will have a major impact on the retail industry. According to the Malaysian Retailer’s Association, the industry might lose up to 90% of overall revenue during the initial 14-day lockdown. Malaysian wholesalers are changing the way they physically operate as access to wet and dry markets becomes restricted. Delivery services such as Grab Food have seen considerable increases in demand given restaurants are only open for delivery.
  • Philippines – Only grocery stores and pharmacies remain open on reduced hours. All malls, restaurants and cafes are closed under the quarantine. There has been a rise in e-commerce platforms and food delivery.
  • Thailand Supermarkets and fresh ‘wet markets’ remain open, as are pharmacies and medical services. The city-wide curfew between 10pm–4am has not had significant impact on access to these services. In retail, grocery items including toilet paper, cleaning products, tinned vegetables, tinned tuna, packet soups, eggs and UHT milks have seen sales growth, as has functional drinks, instant coffee and staples such as cooking oil, instant noodles, rice and sugar. Household stockpiling may slow consumption of these items in the longer term.
  • Vietnam – Some importers and retailers report that total sales have dropped by up to 60% since the COVID-19 outbreak. Vietnamese consumers are stocking up on staple food items (rice, noodles), and household products.

Manufacturing

  • Malaysia – All manufacturing companies require an exemption to the MCO to operate and only those deemed as essential services are granted exemptions. The Malaysian Government is allowing glove manufacturers to operate at full capacity. Malaysia is the largest global manufacturer of rubber gloves and the country supplies approximately 65% of global demand. MARGMA has received requests from 190 countries for rubber gloves.
  • Philippines – Luzon Island, which accounts for 70% of the country’s economy, has been placed under quarantine until 30 April. Food manufacturing is designated an essential service but is being challenged by the workforce’s inability to travel.
  • Thailand – Manufacturing and retail companies that are seeing a rise in demand for their products have been increasing inventory, opening up temporary warehouses and hiring more staff. Increased production has led to strong demand for some raw materials. Businesses are concerned the government may close factories and distribution networks in the future to quell the spread of the virus and how this will impact their operations and staff.

Middle East and Africa update

7 April 2020

Most Gulf States have introduced population lockdowns to varying degrees. Demand for food is high, including Australian food, but supply is problematic. Congestion at ports is causing delays and airfreight availability is limited at greatly increased prices. Most sea ports are working normally, with priority given to food products. Expo 2020 Dubai organisers may postpone the event until 2021; a decision will be made on 21 April. Lockdowns are affecting African economies and Turkey.

Impacts on key industries

Agriculture and food

  • UAE – Demand for food products was high in pre-lockdown periods as consumers stocked up, although food services businesses have fared less well. Major Australian importers, consolidators, distributors and retailers are experiencing high levels of activity; however, port congestion and high freight charges may affect supply.
  • Turkey – Stocks of wheat and pulses appear sufficient, and import permits have been requested if demand rises. Turkey has stopped meat imports as stockpiles are healthy. Meat imports will be considered if market prices increase.

Healthcare

  • Regional – There is increased demand for digital healthcare tools that support the diagnosis and treatment of COVID-19. There is rising demand for personal protective equipment, ventilators and isolation wards with oxygen ports.
  • UAE – Drive-through COVID-19 testing facilities are opening in Dubai and Abu Dhabi.

Logistics: Air and sea

  • Regional – All passenger flights between Australia and the UAE, Kuwait and Saudi Arabia have ceased.
  • Dubai – Emirates Airline hopes to source agricultural produce from Australia to be carried in passenger jet cargo holds. The airline proposes up to five cargo flights a week to Australia from Melbourne. Each flight could transport 60 tonnes of cargo. Aircraft conversions will significantly increase airfreight capacity, although costs will still likely rise.
  • Egypt – Egypt has suspended all passenger flights into the country until 14 April. The consequent lack of airfreight availability means Egypt is not able to import chilled Australian meat. Air cargo is still permitted but capacity is reduced and freight prices have correspondingly increased.
  • Jordan – Food distribution faces challenges, although supplies remain healthy. The port of Aqaba is clearing food consignments but there are delays, partly as a result of requirements for additional documentation. Onward trucking may also face delays.
  • Kuwait – Sea ports and oil terminals are loading and discharging cargo. There are some delays but facilities are functioning well overall. Since 13 March, cargo flights have been exempt from the ongoing suspension of commercial flights in and out of Kuwait.
  • Pakistan – Ports and custom offices are open with a limited number of staff, and so all sea shipments and transactions are currently being processed. Banks are open with safety measures in place. All international passenger flights were suspended on 21 March until at least 11 April.
  • Qatar – Qatar Airways is currently the only airline flying between Australia and the Middle East. Qatar Airways has increased flights to Australia to eight per day, owing to high demand. The airline wants to source agricultural produce from Australia to be carried in airliners’ cargo holds.
  • Saudi Arabia – All sea ports are receiving shipments including Riyadh dry port. Clearances are taking longer than usual due to a reduced number of port and customs staff. Saudi authorities are deferring custom duties on foodstuffs until further notice to encourage importers to maintain supply chains. The Saudi Food & Drug Authority regularly updates the list of countries from which traders cannot import: to date this includes Spain, Morocco, Italy and others.
  • UAE – Etihad Airways is operating some charter flights to bring in foodstuffs from Australia to the UAE. Sea freight from Australia is being delayed. Typically ships take 30 days to arrive in market via Singapore, and delays are currently occurring at or around this intermediate stage. Most airfreight from Australia to the UAE is now routed via Hong Kong.
  • East Africa – Cargo flights are exempt from international flight bans into the region, although capacity is significantly reduced. The Port of Mombasa in Kenya, which serves Uganda and Rwanda, is still operating but delays are expected on most shipping routes due to diversions and country lockdowns. The port of Dar es Salaam, which serves Tanzania and neighbouring countries, is experiencing similar delays for the same reasons. Currently, there are no changes to import conditions as a result of the COVID-19 outbreak.

Mining

  • Regional – Mining operations across the region have stopped or been scaled down.
  • Morocco – The Office National des Hydrocarbures et des Mines (ONHYM) has notified some METS companies that their contracts have been suspended due to force majeure. These notifications do not cancel contracts in place but puts them on hold until the lockdown is lifted.
  • South Africa – All mining production ceased from 26 March, with the exception of mines providing thermal coal to state-owned power generator Eskom. Underground mine operations are required to make arrangements for care and maintenance only. Major miners declared force majeure on 26 March on a wide range of supplier contracts.
  • Turkey – Most mining operations continue but with reduced staff numbers and shifts. Exports of some commodities have almost stopped – including marble exports to China – although some companies are producing for stock.

Infrastructure

  • Qatar– Around 40 Australian SMEs operate in the infrastructure, consulting and logistics sectors. The Qatar Development Bank and several other commercial banks will support SMEs by postponing payments from borrowers for three to six months. GWC, a leading logistics provider, announced that SMEs will be exempt from rent for three months.
  • Saudi Arabia – Major tourism infrastructure projects are continuing in line with current schedules. Construction dates may be pushed back if there are lockdowns/stay-at-home orders for workers. Ramadan (starts 23 April) and summer weather may also affect schedules. Australian companies involved can continue to operate remotely with no site visits until the situation has stabilised.

Webinars

Recorded webinars

Austrade International Health Webinar: Impact of COVID-19 in China

Market updates from China-based health industry experts and Austrade's International Health team regarding China’s health policy response to COVID-19 and the impact of the outbreak for China’s health industry. Recorded on Friday 27 March 2020.

Watch the webinar

Impact of Coronavirus in Australia and China

Hosted by Australia China Business Council on 20 March, the panel included Daniel Boyer (Austrade General Manager for Greater China) on the business impact on the ground in China, and Jenny West (Austrade General Manager for Trade and Investment) on the impact of the virus on Australian tourism and investment industries.

Watch the webinar

State and Territory support

In addition to the Federal Government, States and Territories also provide support, resources and advice for businesses:

Going forward

Austrade will assist businesses and our partner agencies with strategies and initiatives aimed at rebuilding business links and restoring confidence as the worst of the disruption eases.

Students studying in Australia

For the latest information visit Study in Australia.

The COVID-19 outbreak has impacted thousands of Australia’s international students, and our institutions and regulators have moved swiftly to respond to the initial travel restrictions.

Wherever possible, educational institutions are offering courses online, and offering a wide range of support to affected students, including semester and staffing changes and a scale-up of digital course alternatives.

As the spread of the virus continues, our universities and education providers are well prepared to manage potential closures.

Students are advised to check with their individual institution to see what support is available to them.

International Education sector support

Austrade is working with our state and territory and federal partners to provide up-to-date information and advice to minimise disruption to the sector and our international students, both in Australia and abroad.

This Study Australia resource hub is a central source of messages, assets and resources for sector partners. The MIP Weekly Newsletter continues to distribute International Education sector relevant updates.

Useful links