Food and Agriculture Organization of the United Nations
    FAO Data Lab

    News digest - 05/11/2020

    Apologies! The Digest service will be interrupted for two weeks starting on 30/11/2020.

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

    29 June 2019, Bangkok, Thailand - A vendor measures refined sugar into bags at the Klongtoey market in Bangkok.
    ©FAO/Lilliane Suwanrumpha

    FOOD CHAIN DISRUPTIONS

    A group that advocates for sustainable fishing is currently calling on the Canadian government to create a “boat-to-plate” traceability program that would allow the tracking of seafood from vessels and farms to retailers, through the whole supply chain, in order to limit illegal fishing and trade in the country (which is allegedly facilitated by Canada’s regulatory gaps). In South Africa, on the other hand, thousands of sugar growers and farm workers are threatened by persistent droughts and by the fact that the country allows the entry of thousands of tons of cheap sugar imports every year, which discourages processors from purchasing from the local suppliers: for example, Eswatini alone is expected to produce about 7 million tons of sugar, of which 450,000 tons will enter the South African market, because there is no import duty required.  

    Canada’s regulatory gaps allegedly facilitate illegal seafood fishing

    An ocean conservation organization has recently claimed that the Canadian fisheries sector and ocean health are hampered by the regulatory gaps that contribute to illicit seafood fishing and trade: for example, Canada’s labelling requirements are not strict enough, which leads to significant mislabelling of seafood products that makes it difficult to track seafood to its place of origin, and facilitates illegal products to get to the Canadian retailers. Illicit seafood trade in Canada results in lost tax revenues of nearly CAD 94 million annually.

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    South Africa’s sugar industry threatened by cheap imports and persistent droughts

    The South African sugar industry is facing many challenges that currently threaten thousands of jobs and livelihoods (there are around 21,000 small growers and 65,000 farm workers in the country’s sugar industry), especially in the rural areas of the country: these threats are represented mainly by the persistent droughts and by South Africa’s sugar taxes, which facilitate the flow of cheap sugar imports from other sugar-producing countries (for example, more than 500,000 tons of sugar were imported in 2019/2020).

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    IMPACT ON COMMODITIES AND FOOD PRICES

    The FAO has recorded the fifth consecutive increase in food prices worldwide. According to the UN specialised agency, this hike in food prices was mainly driven by grains and sugar prices. The meat index, on the other hand, recorded a decrease by 0.5% month-on-month, with quotations for pig meat dropping due to China’s decision to ban imports from Germany (following the emergence of an African swine fever outbreak in wild boars): for example, pork prices are currently decreasing in the United Kingdom, due to an oversupply of this food product in the European Union. On the other hand, pork prices have recently increased in the Philippines, where the local supply was hit by the African swine fever and the costs of transportation are high.

    World food prices increased in October, driven by grains and sugar prices

    The FAO’s world food price index averaged 100.9 points last month (the highest since January), marking the fifth consecutive increase in average food prices (the index is based on a basket of cereals, oilseeds, dairy products, meat and sugar) worldwide. More in particular, the cereal price index increased by 7.2% in October (roughly 16.5% above its value in 2019), due to the limited supplies and to China’s strong demand, especially for maize. Sugar prices, on the other hand, were boosted by the prospects of a low sugar output in Brazil and India (two of the largest sugar producing countries in the world).

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    Pork prices decline in the UK due to oversupply in the EU

    Today, the second national lockdown in the United Kingdom has begun, and although food service businesses such as pubs and restaurants are more prepared, and consumers will probably not engage in panic buying again, the country’s pork processing capacity could be challenged again. Furthermore, pork prices have been decreasing recently, due to the European Union’s oversupply in the wake of the African swine fever.

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    Transportation costs and African swine fever drive up pork prices in the Philippines

    The inflation rate in the Philippines hit a three-month high last month, and it was mainly driven by food prices, according to the Philippine Statistics Authority. More in particular, meat prices have recently increased in the country: pork was mentioned as the major contributor, pushing meat inflation to 4.7% (from 2.9% in September). The main factors that contributed to this hike in pork prices were the outbreak of African swine fever, and the costs of transportation from farms in the central and southern region of the country, to the North.

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    COUNTRIES' RESPONSE

    A coalition of investors, led by a Netherlands-based sustainable investment specialist company, is planning to reduce deforestation risks (especially within the beef, timber and palm oil supply chain) by using satellite imagery and artificial intelligence to detect changes in forest cover (mainly in Malaysia and Brazil) and induce companies to improve their transparency by making known their lists of suppliers. Meanwhile, the largest supermarket chain in Spain is supporting Spanish and Portuguese food banks in soup kitchens in providing support to food insecure households by donating tons of food.

    Spanish supermarket chain donates tons of food to food banks and soup kitchens

    The largest supermarket chain in Spain has recently reinforced its food distribution programme in collaboration with civil society organizations in the Castilla-La Mancha autonomous community (to which the chain donated around 250 tons of food in 2019), in order to provide support to people in need amid the difficulties caused by the effects of the coronavirus pandemic in Spain. Within the framework of this programme, this year the chain has donated 12,914 tons of food in Spain and Portugal to 60 food banks and 280 soup kitchens.  

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    Investors plan to use satellite imagery to target companies that cause deforestation

    A coalition of investors with a total of EUR 1.8 trillion in assets under management have recently called on companies to end deforestation in their supply chain and improve their transparency by publicly disclosing the lists of their agricultural commodity (especially palm oil, beef and timber) suppliers. More in particular, this coalition plans to identify companies in the palm oil sector whose supply chains involve deforestation risks by using satellite imagery and artificial intelligence to detect forest cover changes in Malaysia.

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    REGIONAL FOCUS

    In Africa, two highly beneficial initiatives continue bearing their fruits: one is the strengthening of the European Union’s engagement with the African Union (symbolized by Malta’s efforts to provide support to thousands of food insecure people in Namibia, which is affected by the negative effects of drought and the coronavirus pandemic), while the other is what was defined as a “quiet agroecological revolution”, carried out by farmers in Niger and Burkina Faso to regreen parts of the Sahel region in West Africa. In Asia, on the other hand, Singapore and Indonesia contributed to the huge increase in fruit exports from Guangdong, China, which are up 27.8% year-on-year and were mainly driven by the export of lychees.

    EUROPE – The EU-Africa partnership underpins Malta’s Strategy for Africa

    In recent months, the European Union has reinforced its engagement with the African Union in order to lay the ground for a new EU-Africa partnership to support economic growth by creating better jobs and improving governance. For example, this approach underpins Malta’s Strategy for Africa, which was launched in January and has proven particularly beneficial for countries like Namibia, which has experienced a food shortage caused by the pandemic and climate change and was supported by Malta’s government through a donation of 500 tons of potatoes to vulnerable populations.

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    AFRICA – Farmers in Niger and Burkina Faso have been regreening the Sahel for 30 years

    Over the last 30 years, hundreds of thousands of farmers in Burkina Faso and Niger have turned large portions of desert land into productive agricultural land, thus improving food security for around 3 million people. More in particular, farmers in Niger have developed innovative ways to regenerate and multiply valuable trees whose roots already lay under their land, while farmers in Burkina Faso used planting pits containing manure to retain moisture and nutrients, and stone bunds to hold bank rainwater.

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    ASIA – Guangdong’s fruit exports have trended upward in 2020

    According to the statistics from Guangzhou Customs, fruit exports from the Guangdong province have increased significantly this year, and reached a total volume of 1092 tons and a value of CNY 36.18 million (respectively a 27.8% and 14.5% increase year-on-year). The main exports included lychees, longans, wampees and pineapples, while among the primary destinations there were both Singapore and Indonesia. One of the drivers for these increases were the programs that provided export guidance to growers in several cities.

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