Air cargo exports of New Zealand products feel the impact of shortage of liquid CO2

The critical shortage of liquid CO2 and dry ice has severely impacted the Air cargo exports of New Zealand products, said an industry body representing freight forwarders on Monday.

Exports account for about a quarter of New Zealand’s gross domestic product (GDP), the World Bank said.

The Customs Brokers and Freight Forwarders Federation of New Zealand (CBAFF) is calling on the government to investigate options to increase domestic production of food-grade CO2, including the possibility of reopening the Marsden Point refinery, which produced CO2 as a by-product of its refining operation, reports Xinhua news agency.

46% of all goods exported by New Zealand are from the food sector, or high-quality perishable goods including meat, fish, dairy, and pharmaceutical products. To fly these perishables internationally on a weekly bases thousands of kilograms of dry ice are used which are created by liquid CO2.

CBAFF Chief Executive Rosemarie Dawson in a statement highlighted that freight forwarders are reporting difficulties with shipping customers’ products out of New Zealand because they cannot source dry ice.

“Dry ice is an absolute necessity for a lot of product that goes out of this country. A number of our members are telling us they simply haven’t been able to ship their customers’ air-freighted product. For instance, one company which would normally use seven to 10 tons of dry ice a week for air-freighting perishable goods, is currently only able to source about 200 kg, and last week they could not source any dry ice in the North Island at all,” Dawson said.

“Dry ice cannot be ‘stockpiled’ as it only has a shelf life of four to seven days. The cost of dry ice has also risen from four New Zealand dollars per kg to 18 New Zealand dollars per kg since October. There are two distributors of dry ice in New Zealand and they can import some liquid CO2 but it is nowhere near enough to meet demand.”

“We compete with Australia, which has dry ice priced at around three New Zealand dollars per kg and is getting its air-freighted product to market reliably at a lesser cost,” Dawson said.

After the closer of Marsden Point last year, New Zealand was left with just one domestic producer of food-grade liquid CO2, Todd Energy’s Kapuni plant in Taranaki. Marsden Point was closed in a safety-related shutdown in December with no current indication of when it will reopen.

If this continues New Zealand exporters can lose the market position in long term due to delays in delivery and rising costs, Dawson said.

Furthermore, a continued shortage will also possibly affect the movement of vaccines and other temperature-controlled medical supplies. Many overseas customers of New Zealand products also purchase small samples for testing ahead of placing a large order, Dawson added.

“We have members who have been unable to ship even small 10 kg to 20 kg samples of items such as pharmaceutical products for testing. Those international customers could look elsewhere,” said the chief executive.

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