Lockdown in China could generate shortages in industries in the region

Region

Components and raw materials are low in stock, which can paralyze production lines

By Ana Carolina Leal

29 Apr 2022 at 07:27

The new lockdown enacted by the Chinese government to contain the progress of Covid-19 cases combined with a standard operation by the Federal Revenue Service can cause a new crisis of shortage of supplies and increase in costs in the RPT (Region of Textile Pole).

China is Brazil’s biggest trading partner. In the region, it is one of the main origins of imports. In Hortolândia, for example, 52% of the products or services come from the Chinese country. In Nova Odessa, the percentage is 19%, followed by Americana with 18%, Santa Bárbara d’Oeste with 10% and Sumaré with 9.9%.

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Titular director of Ciesp (Center of Industries of the State of São Paulo) of Americana, Leandro Zanini says that the current scenario of imports has worried the industries due to the stoppage of production in Asia and the standard operation of the inspectors of the Federal Revenue, a since the movement of loads is taking a longer time, generating more storage costs and also risks of shortages.

According to him, many components and raw materials have low inventories, which put the continuity of production lines at risk of stopping, causing delays in deliveries and lower supply.

“These variables may impact with price readjustments or a decrease in the supply of these products dependent on imported inputs for the consumer market”, he says.

Transport cost and frequency of ships are also problems pointed out by associations – Photo: Ricardo Botelho / MINFRA

According to the president of Abit (Brazilian Association of Textile and Apparel Industry), Fernando Valente Pimentel, for now there is no shortage of products from China, at least in a broad way.

“What we have is cost pressure derived from the increase in raw material costs associated with the problem of transport, which brings disturbances not only due to the increase in freight costs but also due to the frequency of ships”, he explains.

Pimentel adds that Abit is not aware of production interruptions in Brazil due to a lack of Chinese supplies, not least because, according to him, the country has alternatives and possibilities to meet a series of demands from the domestic industry.

“But, without a doubt, the continuation of this situation could jeopardize the supply of some raw materials in the areas of dyes and synthetic fibers”, he concludes.

What is happening in China – Dozens of Chinese cities are undergoing a lockdown to prevent the transmission of the coronavirus. So far, this is not a new wave or variant of the disease. What happens is that the country adopts a “Covid Zero” strategy and, as it has recorded a rise in cases in recent weeks, it has decided to impose restrictions.

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