Wednesday, 19 January 2022 00:31

Supply crisis could lead to new expansion of new Omicron variant

Written by Evelyn Alas

A Spanish media outlet reported that supply chains and manufacturers are beginning to suffer the consequences of the spread of Omicron in China.

It assured that the Asian country is taking strong measures to curb the outbreaks that the new variant is causing and this could lead to strong disruptions in the supply chain. In fact, manufacturers and transporters are already preparing the ground for a more than possible stoppage in distribution.

China's strategy so far in the face of the virus has always allowed factories to keep running and not stop production in the face of the high demand coming from all over the world.

Since mid-october 2021, cases of local infection have been detected every day, so even tighter restrictions are being proposed to curb its spread, and the possible closure of cities would affect the entire supply chain.

China has not seen its production capacity reduced as in countries such as Australia or Japan, where there is a serious food shortage.

The effects are already being felt in several industries. Garment factories have been closed, gas deliveries around one of China's largest seaports have been reduced, computer chip manufacturing in Xi'an has been interrupted and the port of Yiantian (one of Asia's largest container ports) has been partially closed.

This supply crisis, coupled with a shortage of truck drivers or pilots, is causing prices to skyrocket. Shipping containers and commodities are nearing their highest prices in years, a situation that could last until the end of the year, according to Oxford Economics.