New research has revealed just how much coronavirus is affecting food and agriculture markets in New Zealand.
Red meat shipments are being pulled back from China, leaving us with limited markets to redirect it to. Exports of lobster have also been affected.
RaboResearch general manager Tim Hunt says the biggest issue is getting products into and around China.
"Air freight is compromised due to reduced passenger rates, shipping has been slowed down. If you can get the product into China the next problem at the moment is that people just aren't eating out."
There have been over 45,000 confirmed cases of the virus - which was recently given the official name COVID-19 - and the death toll currently stands at just over 1100. The vast majority of all cases and deaths have been in China.
Governments around the world have scrambled to stop the spread of the virus, with many countries - including New Zealand - placing a temporary ban on flights to and from mainland China.
The first case of the virus was reported in December last year, and since then it has spread to more than 30 countries worldwide and shows no signs of slowing down.
The virus has rattled markets and affected trade around the globe.
Hunt says New Zealand farmers will have the automatic stabiliser of a falling New Zealand dollar but the effects will still be felt.
"If this shutdown continues into the second quarter then it's going to be difficult for New Zealand agriculture and the economy to avoid material damage even if we do see the New Zealand dollar fall," Hunt says.
"There could also be long-term effects on the Chinese economy, which will have a flow-on effect to other countries, Hunt says.
"Impacts will start to move beyond logistical disruption and lack of eating out to income in the Chinese market."
Agriculture is not the only industry reeling from the effects of the virus, tourism operators here are also reeling from a drop in numbers and sectors such as forestry have also taken a hit.
Despite the fallout felt already, economist Shamubeel Eaqub says the situation is manageable as long as it doesn't last too long.
"The disruption is really big," Eaqub told The AM Show on Thursday.
"But as long as it's contained in China it's relatively modest for us, even though China's a really big part of our economic connections. If it spreads to the surrounding parts of Asia in particular, that will have a much bigger impact."
Exports will definitely slow while the outbreak continues, Eaqub said, "but they should rebound".
A slowdown in international students coming to New Zealand would also be felt, Eaqub said.
"The international education sector is worth nearly $5 billion, so this is going to have a really big impact."
The challenge once the virus is brought under control, Eaqub said, was to regain our share in the market, particularly in tourism.
"Post SARS what we saw is that we never regained our share of Chinese visitors. All the other competing countries around Asia went so hard after the Chinese market that's where the Chinese visitors went. So that's the risk for us."
