Shanghai port at a standstill: why expect new global shortages and higher inflation?

The city of Shanghai has huge restrictions to deal with the variable Omicron and the resurgence of Covid-19 cases. With the country’s zero-Covid strategy so restricted, the port of Shanghai, the world’s largest, is at a standstill and hundreds of tankers have been blocked. Supply problems raise the specter of further shortages in Europe.

Nearly 500 ships are waiting off the Shanghai port to unload and load their goods. and very restrictive confinement Established in the largest city in China (25 million people) to Variable brake OmicronAnd respect for Beijing’s “zero-Covid” strategy, led for several days to a reality port plug.

shanghai commercial port, The largest in the world In terms of tonnage, and therefore operate at a slower pace due to government restrictions. Due to the shortage of dock workers, pilots and port personnel, the port is no longer able to manage huge traffic which it normally receives.

Major logistical problems were reflected on Wednesday, April 20, with the presence of one hundred boats in the area Hangzhou Bay Between the East China Sea and the Yangzi Jiang, Huangpu and Qiantang Rivers.

With Shanghai in a near-lockdown, this is a map of the merchant ships currently waiting at sea to be loaded and unloaded; Worsening global supply chain problems

— Scott Gottlieb, MD (ScottGottliebMD) April 18 2022

“With Shanghai in almost complete shutdown, here’s a map of merchant ships currently waiting overseas to be loaded and unloaded with goods; exacerbating global supply chain issues,” Scott Gottlieb, a former commissioner for the sea, said on Twitter. United State.

Towards a shortage in Europe?

result of this monster hatGlobal supply chains, already severely disrupted since 2020, are unlikely to return to their pre-crisis speed. Worse, it can make problems Make the already tense situation worse It leads to more shortages in Europe and the rest of the world.

If raw materials can be broken, other commodities should be affected. First, it’s all about the house: dishesAnd plastic and gardening products … but also varieties sports Or the computer indicates Paul TouretteDirector of the Izmar Marine Observatory in Quest, France.

The lockdown in Shanghai is not easing, for now. Port capacity continues to decline.

Inflation will be here for a while. The prices of many tradable commodities will take some time to stabilize.

—Rodrygo Zidane (RodZeidan) April 19, 2022

Rodrigo Zidane, Assistant Professor of Business and Finance in Shanghai, showed a graphic display showing extreme tension current about capacity For the port to manage containers compared to 2021.

“Many of these products are manufactured in this part of China and transited through the port of Shanghai. In January 2022, 4 million containers were processed there,” he adds. Many businesses are affected by this hold if some are at a standstill, and others are in slow motion. Staff sometimes have to sleep on site.

At Carrefour, employees sleep on site

Since the containment began in Shanghai at the beginning of April, employees of French group Carrefour have been sleeping in the brand’s supermarket container in order to respond to online requests from residents confined around it.

Since April 1, Zhang Wei, a supermarket manager, and 43 of her colleagues have holed up inside the store in Shanghai’s western suburb of Xujing, isolated from the outside world. To prepare more than 3000 orders of vegetables, meat and products first need Which his supermarket sends to the detained residents every day, Zhang Wei wakes up at five in the morning after spending the night in a sleeping bag in his office.

Its Carrefour is one of more than 1,000 grocery stores that have opened during Shanghai’s lockdown, although it is subject to strict requirements to prevent the spread of COVID-19. Local authorities are trying to increase the number of open shops.

Towards relaxation in measures?

The city has eased movement restrictions for some people in low-risk areas, but the vast majority of its 25 million residents are under strict lockdown.

Public transport remains closed, and the circulation of unauthorized vehicles is prohibited. The only people who can move are the police, deliverymen, neighborhood committee members and health workers.

“There is no time to rest, We are busy all day“Even during meals, if members of the neighborhood committee come to take orders, or if they have a request, we will help them immediately,” Zhang Wei told Reuters via video call.

Each employee has their own sleeping area in the three-story shop, and some settle into tents for added privacy. Carrefour provided them with protective equipment, such as overalls, and Double their salaries.

The chain, which is majority-owned in China by electronics retailer Suning.Com, hopes to open most of the brand’s other stores by Saturday. Finding food is a preoccupation of Shanghai residents, most of whom have been in strict confinement for at least three weeks, despite the situation. gradually getting better.

swell higher?

Yesterday, the International Monetary Fund announced the arrival of “seismic waves” on the global economy in the coming months. Worrying predictions exacerbated by the conflict in Ukraine and today this massive blockage in Shanghai.

The war adds to the series of supply shocks that have hit the global economy in recent years. Like seismic waves, their effects will extend deep and far, through commodity markets, international trade and financial relations. – Pierre Olivier Goringas, chief economist at the International Monetary Fund.

For 2022, the International Monetary Fund expects a economic inflation 5.7% in advanced economies and 8.7% in emerging and developing economies, up 1.8 points and 2.8 points, respectively, from January. Inflation has become a clear and present danger for many countries.

all over the world…

“These disruptions in transportation and the supply chain will feed problems that already exist in the United States and Europe,” Liang Yan, a professor of economics at Willamette University, told the South China Morning Post last week.

Already at Medilibre, Benoit Mulcay, professor of economics at the University of Montpellier and expert in purchasing power, raised a global problem, especially with regard to maritime trade: “We are in an oil shock similar to what we experienced in the 1970s. Almost all sectors have been or will be affected. Among The embargo against Russia and the situation in Ukraine, two major grain producers, prices in the agricultural sector have already experienced sharp increases. This is also the case for the transportation of goods, in particular by sea. ”

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