Panic buying by British shoppers escalated on Wednesday with shelves stripped bare by alarmed customers hoarding for the coronavirus isolation, prompting Tesco and Sainsbury’s to restrict purchases.
Prime Minister Boris Johnson, who has faced criticism for acting too slowly and too cautiously to tackle the coronavirus outbreak, said on Tuesday that there was no reason to stockpile and that food supplies were safe.
In supermarkets across the land, though, shoppers were spooked. Aisle after aisle were left empty with just ice cream and chocolate Easter eggs remaining at many major stores. Huge queues snaked around some supermarkets on Wednesday, Reuters reporters said.
Sainsbury’s is to restrict customer purchases to combat panic buying. Tesco is allowing shoppers to purchase just two packs of certain items such as dried pasta, toilet roll and long life milk.
Britain’s big grocers, including market leader Tesco, Sainsbury’s, Asda, and Morrisons, along with discounters Aldi and Lidl, have struggled for over a week to keep shelves stocked.
Aldi on Monday became the first UK grocer to introduce rationing, limiting customers to buying four items of any one product during each visit.
Morrisons cautioned it was facing extraordinary times.
“We are currently facing unprecedented challenges and uncertainty dealing with COVID-19,” the company’s chairman Andrew Higginson, and its CEO David Potts said.
The supermarket industry says it is working closely with suppliers to keep food moving through the system and is making more deliveries to stores to get shelves re-stocked.
It says supplies are still coming in from Europe, despite lock-downs in Italy, Spain and France.
One executive said the government was only just starting to understand the enormity of the crisis for the industry.
“They’re in asking questions mode, they’re certainly not in telling us anything mode. They’re trying to understand what we’re seeing rather than telling us to do anything specific.”
The second source added: “Government are asking questions, listening and planning, but we’d appreciate a bit more help to get things moving.”
The source said the government could help by lifting restrictions on driver hours and relaxing Groceries Supply Code of Practice (GSCOP) regulations which slow the industry down.
For years, Hindus and Muslims lived and worked peacefully together in Yamuna Vihar, a densely populated Delhi district.
But the riots that raged through the district last month appear to have cleaved lasting divisions in the community, reflecting a nationwide trend as tensions over the Hindu nationalist agenda of Prime Minister Narendra Modi boil over.
Many Hindus in Yamuna Vihar, a sprawl of residential blocks and shops dotted with mosques and Hindu temples, and in other riot-hit districts of northeast Delhi, say they are boycotting merchants and refusing to hire workers from the Muslim community. Muslims say they are scrambling to find jobs at a time when the coronavirus pandemic has heightened pressure on India’s economy.
The trigger for the riots, the worst sectarian violence in the Indian capital in decades, was a citizenship law introduced last year that critics say marginalises India’s Muslim minority. Police records show at least 53 people, mostly Muslims, were killed and more than 200 were injured.
Dhingra said the unrest had forever changed Yamuna Vihar. Gutted homes with broken doors can be seen across the neighbourhood; electricity cables melted in the fires dangle dangerously above alleys strewn with stones and bricks used as makeshift weapons in the riots.
Mohammed Taslim, a Muslim who operated a business selling shoes from a shop owned by a Hindu in Bhajanpura, one of the neighbourhoods affected by the riots, said his inventory was destroyed by a Hindu mob.
Many Muslims said the attack had been instigated by hardline Hindus to counter protests involving tens of thousands of people across India against the new citizenship law.
Emboldened by Modi’s landslide electoral victory in 2014, hardline groups began pursuing a Hindu-first agenda that has come at the expense of the country’s Muslim minority.
Vigilantes have attacked and killed a number of Muslims involved in transporting cows, which are seen as holy animals by Hindus, to slaughterhouses in recent years. The government has also adopted a tough stance with regard to Pakistan, and in August withdrew semi-autonomous privileges for Jammu and Kashmir, India’s only Muslim-majority state.
Emerging signs of a rush for dollars in the global financial system have spurred calls for the world’s central banks to use a key tool deployed during the credit crisis more than a decade ago: currency swap lines.
The Bloomberg Dollar Spot Index climbed more than 1% for the second time this week on Thursday, reaching a three-year high. The Japanese yen, so often a haven in times of stress, closed little changed despite the biggest stock slide on Wall Street since the 1987 crash. Emerging-market currencies including South Korea’s won and Mexico’s peso have tumbled this week, evidence that foreign investors are yanking money and scrambling into the greenback.
Gauges of dollar demand for traders have shown rapidly mounting strains. While central banks including the Federal Reserve and Bank of Japan have been injecting liquidity into domestic money markets, they have yet to tap into swap lines that were set up more than a decade ago to avoid a paralyzing shortage of the world’s main reserve currency.
“Additional liquidity measures will likely be needed,” Evercore ISI analysts Krishna Guha and Ernie Tedeschi wrote in a note Thursday, after the U.S. central bank ramped up the amount of cash it’s prepared to inject into funding markets. Further action could address the “distribution of dollars globally as companies hit by cash-flow interruptions look to draw down dollar credit lines.”
The swap lines were set up in 2007, terminated in 2010 and then revived as the euro crisis emerged later that same year. In 2013, the Fed made the arrangements with five developed-nation counterparts a standing facility. Given that they involve the provision of currency to foreign agents, the lines have faced political opposition: Some in the U.S. Congress criticized the Fed for extending dollars to foreign entities in the past.
One option is for countries outside the U.S. to draw down their foreign-exchange reserves. But that could quickly turn into a race among traders to see how much of those stockpiles officials would be willing to run down. The Fed swap lines provide the easiest solution, because they have no pre-set limit.
The coronavirus outbreak has hit global demand, but its impact on China’s foreign trade is only temporary, the Commerce Ministry said on Thursday, adding that authorities would roll out more targeted support measures to stabilise supply chains.
The epidemic, which has killed more than 3,000 people and infected more than 80,000 in mainland China, has triggered a record contraction in the country’s vast manufacturing sector, with firms slashing output and losing orders.
The virus has limited employees’ movements, caused blockages in international logistics and reduced global trade, especially of intermediate goods, said Li Xingqian, director of the foreign trade department at the commerce ministry in a media briefing.
But sales in China’s consumer market stabilised in late February as people gradually returned to work after efforts to curb the outbreak had succeeded in some places, Wang Bin, another commerce ministry official, said at the same briefing.
On Wednesday, a United Nations agency said China’s exports of vital parts and components for products ranging from automobiles to cellphones are estimated to have shrunk by an annualised 2% in February, costing other countries and their industries $50 billion.
Li added that exporters are facing great difficulties maintaining orders, securing market share and delivering on their contracts, but fluctuations in trade growth, triggered by a public health emergency, are still within a reasonable range.
Amid concerns that the spread of the virus in South Korea and Japan could mean a second wave of disruption at Chinese factories, Li said imports of electronic products and parts – for which China relies heavily on its neighbours – have so far maintained steady growth.
India’s factory activity growth slowed in February from the previous month’s eight-year high due to a modest weakening in demand and output, although overall conditions remained firm, a private survey showed on Monday.
The Nikkei Manufacturing Purchasing Managers’ Index, compiled by IHS Markit, fell to 54.5 last month from January’s 55.3, above a Reuters poll forecast of 52.8.
It has stayed above the 50-point threshold mark, which separates growth from contraction, for over two years.
“Factories in India continued to benefit from strong order flows in February, from both the domestic and international markets,” Pollyanna De Lima, principal economist at IHS Markit, wrote in a release.
“The pick-up in demand meant that companies were able to further lift production and input buying at historically-elevated rates.”
While the latest survey showed the new orders sub-index, a proxy for domestic demand, slipped to 57.5 in February, it remained above the long-term average since the index was introduced in March 2005.
That encouraged firms to maintain solid output.
However, foreign demand and optimism were weaker in February than in January on rising concerns the spread of coronavirus outside China would affect major Asian economies significantly.
That subdued mood pushed hiring activity to its lowest in three months.
On the price front, both input cost and output charge growth slowed last month, suggesting retail inflation may cool.
That would give policymakers some headroom to address key issues after the recent high inflation-low growth conundrum.
European shares dove 3% on Friday, sliding deeper into correction territory, as investors feared a global recession is on the horizon with the coronavirus spreading across the world.
The pan-regional STOXX 600 was on track to record its biggest weekly decline since the height of the global financial crisis in 2008.
The index entered correction levels on Thursday, a 10% decline from its recent peak, along with markets in the United States and Asia.
Four more countries reported the first cases of coronavirus, pushing the number of countries outside China, the source of the outbreak with infections, to 55.
The death toll in Italy, Europe’s worst-hit country, rose to 17 and the number of people infected rose by more than 200 to 655.
Among the major sectors, miners , travel & leisure stocks and technology were the biggest decliners, down between 3.8% and 4.1%