Food and Agriculture Organization of the United Nations
    FAO Data Lab

    News digest - 02/07/2020

    Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.

    Rice fields Vietnam
    ©FAO/Aris Mihich

    FOOD CHAIN DISRUPTIONS

    The news coverage on the consequences of the coronavirus pandemic on the economy of the developed countries generally relates to unemployment, food and corporate losses; furthermore, the health crisis exposed issues in different sectors, such as the consolidation of the US food system. On the other hand, COVID-19 in the developing world is linked with underlying urgent situations that may escalate in the following months, like the civil war and wheat shortage in Syria or the overabundant informal sector and locust swarms in sub-Saharan Africa.

    Siria y el Covid-19: Impactos y autoritarismo gubernamental

    Syria faced all the difficulties undergone by most of the countries during the coronavirus pandemic; however, it was confronted with such hassles in a state of internationalised civil war and administrative fragmentation, which heavily hampered the containment measures. For example, many medical facilities were affected by the bombings and 923 medical staff died between 2011 and 2020. More recently, Damascus is also facing a shortage of wheat and bread, which are fundamental for the diet of Syrian people.

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    Preventing Covid-19 from becoming a hunger crisis in Africa

    Most of the news related to COVID-19 in the developed countries relate to unemployment and corporate losses. On the other hand, in sub-Saharan Africa around 70% of all workers operate in the informal sector and live from hand to mouth every day, meaning that for them job losses represent a serious threat to food security, which was reinforced by a second swarm of locusts that devoured the East African crops in April. To prevent a new hunger crisis, African governments should establish a regional trade bloc for food supply and ensure farmers have access to loan packages.

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    Michigan's local food economy rises to meet COVID-19's challenges

    The coronavirus pandemic in the United States exposed the benefits that would bring a robust local food economy, compared to the current reality characterized by a global industrial food system influenced by a few large companies. Even though the food supply chain is still at risk at the national and international level, small Michigan farmers have adapted quickly and are now focusing on communicating to the consumers the importance of purchasing locally produced food products.

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    IMPACT ON COMMODITIES AND FOOD PRICES

    While the productions of vegetable oils, sugar and dairy around the world rebound and drive a general increase in global food commodity prices, the cereals and meat industries are still facing difficulties, and the UK could lose its status as global fine wine hub in the aftermath of Brexit. In Ireland, a new online platform will allow farmers and meat processors to avoid supply chain fees when selling and buying cattle at livestock marts around the country.  

    Global food commodity prices rebound in June

    Expanding on the analysis offered in yesterday’s news digest, the FAO Food Outlook, a biannual publication that focuses on developments in the global food markets, underlines an increase in global food commodity prices during the month of June, for the first time since the beginning of 2020. More specifically, such increase was driven by a recovery in vegetable oils, sugar and dairy quotations. However, the coronavirus pandemic is still slowing down a rebound in cereals and meat production.

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    UK fine wine industry “in peril” post Brexit transition period

    The UK is responsible for a third of the world’s fine wine trade, which is worth around GBP 5 billion, although most of the wine is not produced in the country. This has made so far the United Kingdom a global wine hub, but as the coronavirus pandemic has drawn the government’s attention away from the Brexit transition period, the country could lose such a central position in wine trade. The main recommendation to avert this possibility comes from a panel of experts in the field and consists in joining the World Wine Trade Group and introducing zero tariffs.

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    Irish Agri-food veterans launch Tradeforus online livestock trading platform

    Similar to what a draft legislation proposed in the United States, two Irish agri-food veterans set up an online livestock trading platform to support the country’s farmers in selling livestock and meat processors in buying it. This would reduce intermediations: in fact, farmers pay on average between EUR 5 and 10 per animal through the mediation of factory agents, while meat processors pay additional fees to beef factory representatives at livestock marts. The online platform drastically reduces such fees to EUR 2 per animal.

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    COUNTRIES' RESPONSE

    Three recent government measures around the world that share the objective of enhancing farmers’ and fishers’ livelihoods: Spain integrated an EU directive on fishermen’s improved working conditions into national law; the US Department of Agriculture granted USD 153,767 to a school feeding program in Vermont that directly links farmers to schools; the Ghana Cocoa Board raised additional funding to assist farmers during the next cocoa crop season.

    Mejoras en las condiciones de trabajo en el sector pesquero

    A new royal decree issued by Spain’s government will incorporate an EU directive into national law, improving the Spanish fishers’ working conditions by adopting the highest standards currently existing in the field of fisheries. More specifically, the royal decree relates to the minimum on-board working, accommodation and dietary requirements, health protection and medical care, for both fishers and shipowners.

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    Leahy announces two federal Farm to School grants

    A US senator recently announced that the Vermont Agency for Agriculture, Food and Markets received grants from the US Department of Agriculture totalling USD 153,767, which will be channelled into Food Connects’ Farm to School program, that supports Vermont’s farmers in ensuring food security for children in schools. The program will have a tangible impact, as in Vermont’s Windham County 1 in 6 children are food insecure, and 60,000 children in the state eat school food five days a week.

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    US$1.3bn cocoa loan safe from COVID-19 grim – COCOBOD boss

    In September 2019, the Ghana Cocoa Board (COCOBOD), a government-controlled institution that sets cocoa prices in Ghana, reached a USD 1.3 billion cocoa syndicated loan agreement from 24 banks for the purchase of cocoa beans from local farmers during the last crop season. The Chief Executive of the COCOBOD recently stated that the institution has paid its 2019/2020 loan facility in June 2020, despite the present difficult times, and issued a request for proposals to the banks to raise funds for the next cocoa purchases.

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    REGIONAL FOCUS

    In Vietnam, the persistent rains in the Mekong Delta are slowing down the rice harvest (but rainfall is projected to decrease in mid-July, leading to an increased rice quality), which caused prices to plummet, while the supply of coffee beans in the Central Highlands is scarce, as the current crop year will end in September. Thai and Indian rice export prices also decreased, while the supply of the Indonesian robusta coffee beans is stable. Finally, African banks and small businesses will receive support through two new development projects designed by the CDC Group.

    ASIA – Asia rice-Thai rates slip as demand drops, rains hamper Vietnamese harvest

    Thai rice export prices decreased as a consequence of stagnation in demand, falling to their lowest level since May. However, they are still higher than those of Thailand’s competitors, Vietnam and India, and they are likely to remain so until new supplies enter the market. In Vietnam, persistent rains in the Mekong Delta (which is the biggest rice producing region in the country and is often referred to as “Vietnam’s Rice Bowl") are hampering the rice harvest.

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    ASIA – Asia Coffee-Tight supply keeps market quiet in Vietnam, Indonesia supplies rise

    There are almost no coffee beans left in Central Highlands, which is Vietnam’s largest coffee-growing area; therefore, no new export contracts will be signed until the next harvest, that will start in October. On the other hand, Indonesia exported more than 14,000 tons of coffee beans in June. and the supply of the Sumatran robusta beans has increased this week.

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    AFRICA – New business and supply projects for CDC Group

    The UK’s development finance institution, CDC Group, has recently unveiled two new projects in partnership with Finnish DFI Finnfund and French Société Générale, that will support small businesses and supply chains in Africa. The first one is aimed at a general African enterprise growth, while the second will increase the lending limits which Société Générale provides to African banks.

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