Tyson Foods Inc. (NYSE: TSN) is the world’s second-largest processor of beef, chicken, and pork. Generating revenue of more than $42 billion in 2019, it’s also one of the largest companies in America.
Through its Tyson brand and others like Hillshire Farm, State Fair, and Wright, it’s a major exporter of packaged and processed foods to China.
In a statement released by China’s General Administration of Customs over the weekend, it was revealed that the central government would temporarily ban imports of Tyson products, because of a breakout of COVID-19 infections at some of the company’s plants.
Tyson made it public last week that it had tested more than 3,700 of its staff in Arkansas, and confirmed 481 Coronavirus infections in its workforce.
In a statement to CNN, a Tyson representative said that “We are confident our products are safe and we’re hopeful consultations between the U.S. and Chinese governments will resolve this matter.”
Virus Not Transmitted Through Food
China is a major consumer of American processed pork, one of Tyson’s key areas of business. In the first quarter of this year, China purchased 600% more U.S. pork than it did a year ago.
According to the World Health Organisation and various studies, there is no evidence that the Coronavirus is transmitted through food. However, Chinese officials have stated that the virus could be hidden on food packaging. In some cases, the virus can remain viable on paper and cardboard packaging for days.
It’s not the first time that the Chinese government has placed a blanket ban on American food products. America once exported around $500 million of poultry each year to mainland China, before products were banned in 2015 because of a bird flu outbreak.
Tyson Stock Falls Heavily
Stock in Tyson Foods dipped by -1.25% on Friday and was down almost 2.58% in early premarket this morning.
Investors could see Coronavirus infections as a risk. However, contrarians may see that with extensive testing, the company is now ready to overcome its low point. Tyson still generates strong business outside of China, and with the stock being effectively discounted, it could be the ideal time to buy.
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