COVID-19: Raw Material Shortages in China

Feb 24, 2020 | Article, News

China plays a fundamental role in the global supply chain for all sectors. According to Dun & Bradstreet, COVID-19 could have an impact on over 5 million businesses worldwide, the latest reports indicating spikes in prices for the global pharmaceutical market.

70% of all raw pharmaceutical ingredients used in India, the worlds’ biggest exporter of medicine, are sourced from China. A staggering 100% of ingredients for crucial medicines such as antibiotics are all sourced from China. Last week, a sudden price spike in such ingredients was reported across multiple pharmaceutical enterprises in India. The price of many mainstream antibiotics has risen by 50% since the outbreak in January as ingredient prices have doubled. China is now running out of the raw materials due to travel restrictions and staff shortages.

Chemical factories in the disease-stricken provinces of Hubei and Henan have not yet received approval to re-open by local authorities and are likely to remain shut until mid-March. Posing another obstacle is the fact that less than 50% of logistical workers have returned to work, meaning the delivery of products continue largely at a standstill, stagnating the motion of the Supply Chain.

Many global enterprises including Apple have stated that the upmost priority at this moment in time is the concern over the health of their workers and partners in China. The necessity of COVID-19 containment measures are beginning to take effect according to statistics collected over the weekend, showing a decline in the number of cases across China. Statistics also indicate concerning developments in other parts of the world. 11 north Italian towns have been on lock-down since Friday night in an attempt to contain the spread of the virus which has now infected 152 individuals and resulted in 6 deaths.

Uniserve are investing time in modelling our capabilities to give accurate forecasts based on the shifts in demand whilst sourcing solutions to support them. If you require any specific updates please do not hesitate to contact the Uniserve Coronavirus Helpline team on 01375 851 346 or by emailing us at info@ugroup.co.uk

 

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