Many Chinese export products reach Eastern Europe and Russia via harbors in the Netherlands, Germany, or Turkey. The recent Russian invasion of Ukraine creates significant difficulties for Chinese exporters. Large volumes of export products are stuck in transit ports, and are sold there instead. This situation stimulates intense competition and prices are dropping.
Manager Zhang of Jining Greenstream Fruits & Vegetables Co., Ltd. explained that the company has shipped a large volume of garlic to Eastern Europe, but the recent outbreak of war in the region interrupted transport.
"We have several shipping containers currently in Rotterdam harbor. These containers were destined for Saint Petersburg, but Rotterdam port authorities refused to forward the containers to Russia due to the embargo on trade with Russia. There is no other solution than to temporarily store the containers in the port. And reports show that Rotterdam currently stores containers from exporters all over the world who are all in the same situation. All these containers await redistribution. One good thing about this situation is the help we receive from our shipping company Maersk. They are helping exporters resolve the situation and even offer discounts on some of the shipping fees."
"We are not the only company to suffer from this situation. All Chinese export companies with containers full of ginger or garlic destined for Russia or Eastern Europe face the same challenge. Many exporters hope to find new clients near the harbors where their products are temporarily stored. That would relieve pressure on the harbor and solve some of the congestion problems. However, the volume of ginger and garlic for sale in and around the Netherlands is now so large that the price is under a lot of pressure. Exporters drop their prices to speed up the process and clear their containers from temporary storage.
The export price of ginger and garlic shows a downward trend. Recently the FOB price of air-dried ginger reached 650-700 USD per ton, while the FOB price of common-size garlic is around 900-950 USD per ton," said manager Zhang. "Our garlic has a relatively long shelf life, but for exporters who transport fruit the losses are rather more severe."
"In addition to transport problems, there are also issues with currency exchange. The Russian ruble lost much of its value and that complicates matters for Russian importers. Clients are unwilling to accept the current exchange rate. They prefer to wait for the ruble to rise before they complete transactions," said manager Zhang.
"The embargo interferes with transport to Russia, but Ukraine is also affected by the ongoing war. The port in Odessa was closed after the outbreak of the war and shipping companies had to redirect their cargo ships to nearby ports, for example in Turkey. Exporters find it challenging to re-sell their products in the area."
In addition to ginger and garlic, Jining Greenstream Fruits & Vegetables also exports pomelo and lemons.
For more information:
Jining Greenstream Fruits & Vegetables Co., Ltd.
WeChat: +86 158 5379 8811
WhatsApp: +86 158 5379 8811