Coronavirus & face masks: Learning the right lessons

• With the death toll crossing 2,000 and around 75,000 plus confirmed cases in continuation, the expected global demand of face masks is anticipated to rise exponentially.

• In the international market, the wholesale going rate of such face masks has climbed to US$ 8-10. This makes exports far more remunerative for manufacturers than supply to the domestic market.

• There has also been an upward revision of prices. Some industry estimates range the combined market size of these personal protection equipment products at ₹2,500-3,500 crore. Just a few days back, the ban on exports of some personal protection equipment was set aside, except for N95 masks.

• Hong Kong, Singapore and Taiwan are currently major importers of face masks, surgical masks and N-95/99 masks due to the preventive measures. Many dominating US firms like 3M and Honeywell are growing their manufacturing and exports of these mentioned masks.

Medical face masks have become the enduring image of the coronavirus outbreak. With the death toll crossing 2,000 and around 75,000 plus confirmed cases in continuation, the expected global demand is anticipated to rise exponentially. According to Wall Street Journal, more than 0.5 million surgical masks were immediately supplied in Chinese hospitals by some not-for-profit organizations from USA.

The US itself has begun a serious evaluation of where its industry stands when faced with such a situation. On an average, the annual production of masks in the US has been estimated to be 1.5 billion for N95 respirators and 3.6 billion surgical masks, according to a 2017 report in the Health Security journal. The report also estimated that 1.7 billion to 3.5 billion N95 respirators and 100 to 400 million surgical masks will be required just to protect health-care workers in the event of a severe influenza pandemic. This indicates how challenging such a situation can be for any country. 

In India’s case, the market for According to data shared by All Food and Drug License Holders Foundation (AFDLHF), which represents around 7,000 pharmaceutical suppliers, the total market for masks has surged to Rs 450 crore over just two months from about Rs 200 crore annually. India’s capacity to make masks is at just around 300,000 to 400,000 annually, and it has a stock of 2.5-3 million. And sales have already surged to 1-1.2 million a month due to the coronavirus scare. This is similar to the peak pollution scare in New Delhi, but in this case, it spreads well beyond the national capital.

In the international market, the wholesale going rates of such face masks have climbed to $8-10. This makes exports far more remunerative for manufacturers than supplying to the domestic market. As it is known the outbreak of coronavirus epidemic with epicentre in Wuhan, Indian stakeholders have an opportunity to escalate the exports of pollution and surgical masks across globe. India’s domestic markets, including wholesale and retail, are nearly 80-90% dry with shortage of face masks. There has also been an upward revision of prices.

Global markets are already seeing tremendous up-tick in demand which is slowly spiralling into the Indian market as well. If the government does open the market for exports, the price impact back home would be felt too. However, the binge face mask buying might ultimately not lead to any tangible results in curbing the spread of coronavirus. Hong Kong, Singapore and Taiwan are currently major importers of face masks, surgical masks and N-95/99 masks due to the preventive measures (which are considered safer and hence in greater demand). Many leading US firms like 3M and Honeywell are growing their manufacturing and exports of these mentioned masks.

Tariff Lines of N-95/99/surgical face masks for India

Source: ITC Trade Map

India’s manufacturing industry has gone into overdrive to produce more such personal protection equipment to leverage the growing demand in the domestic and global market. Industry experts cite the phenomenon of binge fear buying, as people rush to medical stores to get their hands on either N95 or simple surgical face mask to protect themselves from the threat of coronavirus.

With the government relaxing export norms, there might be scarcity in India for normal surgical masks in the short term, for which the industry must brace itself. But the present situation should be a wake up call for the country to improve capacities and stocks to deal with such situations in future, especially if we were to face an epidemic even remotely similar to the present one in China.