In China, power cuts have forced factories to shut down for several weeks and disrupt the global supply chain. The slowdown will continue, economists predict. In Morocco, the impact is beginning to be felt in the market, according to importers.
The power cuts that have been hitting China for several months have intensified in recent weeks and are hampering the manufactures of the Atelier du Monde. As order books overflow, factories idle, machines come to a standstill, supply chains are clearly under threat. The main reason for these interruptions remains both above all the strict application by the Middle Empire of environmental standards in terms of reducing carbon emissions (the country having committed to carbon neutrality by 2060), but also because of the soaring price of coal, knowing that 60% of the electricity consumed in China comes from power plants powered by this fuel.
This shortage of electricity is likely to aggravate the supply problems for many sectors such as semi-conductors, textiles, or toys… Order books are full and the gigantic manufacturing industries of the second world economy are struggling to meet global needs. “Obviously, this is bad news for players in the toy market. At our level, we don’t have a choice yet, except to submit to the situation by waiting and seeing”, we say at La Grande Récré, where we regret that the poor quality of certain toys imported by certain operators continues to penalize those who have bet on quality, safety… “Even the possibility of helping out with European wholesalers who had anticipated their purchases in China for Christmas a little bit because of the container crisis , walked away. They are certainly willing to deliver to us, but they cannot mobilize four to five people for labeling, not to mention the compliance issues that require a lot of energy. These wholesalers therefore prefer to sell their toys on the European market where demand is currently strong,” we add.
Read also | Ali Seddiki: “Morocco Now offers investors a new carbon-free and competitive industrial investment platform”
On the side of the Moroccan Association of Importers of Toys and Similar Products (AMIJ), they also say they are worried about these power cuts which come on top of the shortage of containers and the explosion in the cost of sea freight. “It has been a few months since we changed suppliers in China because of shipping. Since then, we have been importing from local European manufacturers for practically the same price levels as in China,” underlines Zakaria Mouss, manager of Toysing, which specializes in large games for nurseries, schools and mini-parks. Like toy importers, many other sectors of the economy are struggling to source and deliver their deliveries. “In addition to the shortage of containers and the explosion in the cost of maritime freight, Chinese factories must limit or stop their activities to reduce their electricity consumption. This is not without lengthening delivery times. This is the case with the “Takado” electric scooters and motorcycles for which production times have been postponed,” explains Mehdi Laraki, CEO of Takado, a pioneer in Morocco in the distribution of 100% electric scooters, motorcycles and tricycles.
According to the latter, also Chairman of the Morocco-China Business Council within the CGEM), Chinese industrialists, who had so far benefited from a rapid and strong recovery thanks to vaccination throughout the world, are impacted also by this situation. Producer prices are at their highest level, amid soaring commodity prices. “Shortage of electricity, shortage of containers and soaring prices of raw materials, this is starting to do a lot and does not bode well for 2022”, worries Mehdi Laraki.
Be that as it may, on the ground, response times from Chinese suppliers are getting longer. Usually responsive within 24 hours, Chinese manufacturers can take several days to respond, says a manager of a Casablanca-based food import-export company. “For vermicelli from China, lentils and corn that we bring from China, among others, we are currently troubleshooting with our stocks while hoping that in two to three weeks, we will have visibility. What we do not yet have at the time when I speak to you, ”he said. Toys, utility cars, automobiles, machine tools, generators, TVs, household appliances, computers, motorcycles, electrical and electronic components, textiles, tea, etc.
Chinese products are present everywhere in the Kingdom and reflect the rise of the Middle Empire in the world economy for several years.
In Morocco, in fact, China ranked fourth supplier with more than 51 billion DH in 2020, according to statistics from the Foreign Exchange Office. Very diversified, these imports cover nearly 120 products with, however, a qualitative grouping, since they are products with high added value, among other capital goods. These import flows further widen the trade deficit vis-à-vis China, which has continued to grow since 2011, and amounts to 49.43 billion DH in 2020 against 47.34 billion DH in 2019. In other words, Moroccan imports from China represent 25 times exports. In fact, the Kingdom is struggling to position itself in this Chinese market of nearly 1.4 billion consumers and with enormous absorption opportunities with a share that remains below the potential offered by the Moroccan economy.
Read also | Younes Laamarti: “No one knows when sea freight prices will return to normal”
China buys for 2.47 billion DH (less than 1% of Moroccan exports), mainly raw products of mineral origin (mainly zinc, copper, lead, phosphates, manganese, scrap metal, marble, granite and gypsum). To this category of products, which represent half of the shipments, must be added another, made up of agricultural and seafood food products. Next come semi-finished products, in particular phosphoric acid, glass, plastics, cotton… The Kingdom nevertheless manages to place a certain number of finished capital goods and finished consumer products. Among these, we can cite: electrical transformers and converters, piston motors, measuring and control instruments, conductive wires and cables, aeronautical and automotive parts, various machines and apparatus, shoes, ceramic objects, footwear, watches , dishes, ready-made clothes,…
For Mehdi Laraki, we must now build the future differently with China. “With the Silk Road project, China really wants to invest in joint ventures in the countries concerned, in order to produce locally in these regions. This means that all these large Chinese exports in recent years will decline in favor of local or regional production in the countries of the Silk Road. This is also why agreements have been signed to this effect. The idea is to make Morocco a real hub for Africa”, underlines the President of the Morocco-China Business Council.
Source: https://www.challenge.ma/penurie-delectricite-en-chine-les-importers-marocains-sinquietent-224726/
