Morocco’s Tea Stocks Severely Disrupted by the Coronavirus

In China, the coronavirus continues to spread. According to the latest official statistics, there have been nearly 64,000 cases of infection and 1,380 deaths. The country is facing a health alert on an unprecedented scale that is impacting not only its economy but also that of many other countries.

Morocco, China’s Main Customer

Morocco is no exception to the rule. And one of the sectors most affected is the tea sector. Morocco’s tea imports, which amount to nearly 70,000 tonnes annually, come from China.

Morocco positions itself as China’s leading partner, buying more than 25% of China’s overall tea exports, according to the Moroccan Association of Tea and Coffee Industrialists (AMITC).

In 2019, the 100 or so importers in the sector imported more than 62,000 tons for more than 1.7 billion DH.

The supply of the sector is now under tension and “major disruptions are looming,” reports an operator.

“As for the other sectors, the tea factories closed during the Chinese New Year holidays. With the virus that has begun to spread in the country, the Chinese authorities had decided to extend the closure of these factories beyond the New Year holidays,” another industry source said.

“We have been in this situation since mid-January. Our suppliers say that the factories are scheduled to reopen next week, but nothing is certain at the moment. We’re still waiting to see what happens,” our source continued.

Is the Reopening of the Factories Imminent?

Although Moroccan operators are noting supply disruptions, “it has no immediate impact on the local market,” they assure us.

“There are no disruptions on the domestic market because we have stocks,” they explain. These stocks obviously differ from one operator to another, but they generally cover at least 1 to 2 months, or even 3 months.

The long delivery times from China inevitably push operators to have stocks. “It takes two months on average between the time the goods are put into containers and the time they arrive at the depots,” explains our source.

If industrial activity resumes as expected in China in the coming days, it is highly likely that no disruption will be felt on the domestic market. On the contrary, if the outbreak worsens and factories remain idle, the disruption will be visible on the local market and not just in the tea sector.

China is considered to be the factory of the world. The globalization of production chains and the breakdown of value chains means that several sectors, starting with the automotive sector, will experience major disruptions affecting several countries around the world.

For the time being, the Moroccan automotive sector does not seem to be affected. “We are following this issue closely. To date, there is no disruption. We must remain alerted if it continues,” an authorized source at the Ministry of Industry told us.

1 Comment

Leave a Reply

Your email address will not be published.