Coronavirus a cause of pessimism in Asian markets

Coronavirus a cause of pessimism in Asian markets

ARTICLE  · 17 Feb 2020

Since the novel Coronavirus virus (recently dubbed COVID-19) made the jump to humans from bats, it has taken flight to infect thousands around the world and kill hundreds – raising alarm bells for the World Health Organisation and national governments.

Wuhan, China, where the virus originated, has found itself at the centre of unprecedented restrictions on freedom of travel, with 70 million people effectively quarantined by the Chinese Government.

While this has an obvious effect on those in the immediate area, the nature of the modern interconnected global supply chains means that businesses worldwide can expect to be affected.

Some experts are predicting the outbreak could cause China to lose one whole percentage point of full year economic growth in 2020. This comes as the already troubled Japanese economy is facing potential recession, with the December quarter shrinking at its quickest pace in six years.

The coronavirus has also been cited by multiple South East Asian governments in the International Tropical Timber Organisation as a source of pessimism for timber exporters.

However, it will likely be some time before the full economic effects are known. Ultimately markets are made up of people and subject to their confidence and COVID-19 is stoking fears, but it is unclear just how deadly the virus may yet prove.

Clearly the arrival of the virus in London will do little to help the UK economy, particularly as a one-year transition period leaves much to be arranged between the EU and the UK, with the war of words only just beginning.

While we have not heard of any immediate affects to supply, depending on the severity of the virus longer term we could see far greater effects.

For the latest updates on COVID-19 in the UK, as well as guidance for any of you who may be due to travel internationally, please check the following link where information is being shared by the Department of Health and Social Care and Public Health England:

https://www.gov.uk/guidance/wuhan-novel-coronavirus-information-for-the-public

If you are a TTF member that imports timber from China, please fill out this survey on how the Coronavirus has or has not affected your business.