ARCHIVED - Coronavirus in China begins to affect Murcia wine and furniture exports

The Mobile World Congress event in Barcelona this month has been cancelled due to fears over infection

The recent spike in the number of patients diagnosed with coronavirus in China, and in the number of deaths associated with the condition – the latest figure to emerge from mainland China is 1,380 – is already having serious consequences on life in Spain, with the headlines on Thursday making ample reference to the cancellation of the annual Mobile World Congress event in Barcelona, which was due to start on 24^th February.

The organizers of the Mobile World Congress, which is estimated to be worth about 500 million euros to the economy of the city every year and creates some 14,000 part-time jobs for locals, explain that the cancellation is a direct result of some of the major exhibitors and participants having already announced that they will not be present due to coronavirus fears, including Amazon, BT and Nokia, Facebook, Ericsson, Intel, Cisco, Vodafone and Deutsche Telekom.

Employees of the Chinese firm Huawei had already flown to Spain and were in self-quarantine prior to the start of the congress, but the organizers had banned people coming from Hubei, the city at the heart of the outbreak in China.

Over 100,000 delegates had been expected at the event, the world’s largest mobile phone trade fair, representing 200 countries during the four days scheduled, but after more than 40 companies cancelled their attendance the organizers decided to pull the plug on the 2020 edition. Already they had considered introducing measures such as a ban on handshakes and taking the temperature of all attendees, but this merely heightened the worries of participating companies and led to more cancellations.

In the Region of Murcia, meanwhile, it is reported that the effects of the partial shutdown of economic activity in China is having an effect on exporting businesses, particularly those in the furniture and wine sectors. Around 400 companies in Murcia made sales in China last year, and for exporters the coronavirus scare comes on top of the uncertainties brought about by Brexit and the US trade tariffs imposed by Donald Trump, bringing about the cancellation of orders and the halting of containers shipped from Spain to China at ports of entry in south-east Asia.

Last year export sales from Murcia to China reached 325 million euros by the end of November, approximately a third of the figure for sales to the UK, following a growth of 66 per cent over the previous three years, with the sectors most involved being petrochemical products, frozen meat and other foodstuffs and wine. At the same time. Murcia’s imports from China rose to 500 million euros, the largest contributors to the total being spices and food ingredients, chemical products and footwear.

But the range of trade is far wider than this, and for example the important furniture sector in Yecla has come to depend to a certain degree on the import of textiles from China for the sofas produced. In 2019 over 2 million euros of export sales were made by wooden furniture manufacturers in Yecla, and the current situation is causing unwanted disruption to both income and activity.

Similarly, the D.O. Jumilla wine producers’ association reports that many members are anxiously awaiting the end of the epidemic: sales to China had increased during the celebrations of the Chinese New Year in January but now they have all but come to a halt, and recent growth in the Asian market has led to China representing around 10 per cent of all export sales for Jumilla wine (approximately 2 million euros per year).

Similar problems are reported in Yecla, where China accounts for as much as 20 per cent of wine exports, and as the Chinese authorities impose strict restrictions on business activity those Murcia companies present in the country are suffering the consequences.

On the other hand, the scare in China could mean good news for other sectors in Murcia: for instance, a lack of mandarins on the international market could lead to more demand products grown in the Costa Cálida and higher market prices.

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