Food and Agriculture Organization of the United Nations
    FAO Data Lab

    News digest - 05/08/2020

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

    A vendor measures refined sugar into bags at the Klongtoey market in Bangkok.
    ©FAO/Lilliane Suwanrumpha

    FOOD CHAIN DISRUPTIONS

    In order to prevent another wave of coronavirus contagion inside meat processing plants in the Australian state of Victoria (where the number of cases is growing each day since early July), the state premier introduced new lockdown restrictions that will reduce the workforce in meat processing plants. Decreased operations and panic buying may lead to meat shortages in supermarkets and grocery stores, but this time they would only occur in Victoria. A similar threat pushed various seafood companies and trade associations in Asia to urge the governments of the five largest shrimp producers to take actions to limit the spread of the coronavirus in shrimp farms.

    World’s largest shrimp producers urged to take action against Covid-19 outbreaks

    Given the major supply chain disruptions caused by different diseases that spread rapidly across Asian shrimp farms in 2012 and 2013, the governments of China, India, Indonesia, Thailand and Vietnam (the world’s five largest shrimp producers) were urged by various seafood companies and trade associations to take action now to stop possible coronavirus outbreaks in the shrimp farms. Diseases threaten seafood sustainability and jobs, and disrupt the reliability of supply chains, costing the industry billions of dollars each year.

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    Consumers return to panic buying after new lockdown restrictions in Australia

    Immediately after new lockdown restrictions were announced by Victoria’s state premier, in Australia, many consumers in Melbourne returned to panic buying, out of fear of not being able to find meat in supermarkets and grocery stores during the next 6 weeks. This time, however, experts predict a better response to possible shortages (caused both by panic buying and by a decrease in meat processing plants’ workforce), after the first nationwide lockdown in Australia, during the early phases of the coronavirus pandemic.

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    IMPACT ON COMMODITIES AND FOOD PRICES

    China’s objective to maintain a stable food supply amid the aftermath of its worst flood in decades led the country to increase its imports: China is projected to import 6 million tons of wheat during next year (mainly from the United States, France and Lithuania), and it increased its palm oil imports from Malaysia after reducing rapeseed oil purchases from Canada. In the Philippines, higher transport costs have already had repercussions on food prices, which increased for meat, fish and fruit.

    China forecasted to import 6 million tons of wheat in the coming year

    China has been under pressure to fulfil its annual grain import quotas under WTO commitments and wheat acreage in the country has been shrinking to prevent the excessive usage of underground water. For these reasons, according to the China National Grain and Oils Information Centre, China will import 6 million tons of wheat during next year to secure domestic food requirements: this is the largest amount of wheat imported in the country since 2013. Most of the wheat will be coming from the United States, France and Lithuania.

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    Palm oil production decreases in Malaysia, while exports remain stable

    Due to a worsening labour shortage amid the coronavirus pandemic and to heavy rains, Malaysia’s palm oil production decreased by 5% to 1.79 million tons despite entering the season for peak production, and July stockpiles were estimated at 1.67 million tons (the lowest level since 2017). However, exports in July increased by 2% (after the demand for palm oil heavily decreased in February): India remains the top buyer, while China may import more from Malaysia as it reduced rapeseed oil purchases from Canada.

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    High transport costs affect inflation rate and food prices in the Philippines

    According to the Philippine Statistics Authority, the country’s inflation rate reached 2.7%, mainly due to higher transport costs. This could have a repercussion on the food supply chain: for example, prices of food (meat, fish and fruit, more in particular) and non-alcoholic beverages have already increased, but at a slower pace than last month. On the other hand, rice prices declined by 1.2%.

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    COUNTRIES' RESPONSE

    Both the Philippines and the state of Montana are focusing on financial support as a way to mitigate the risk of future coronavirus lockdown: more in particular, a program implemented by the Philippines’ Department of Agriculture aims at increasing national agriculture and fishery output through the intensified use of quality seeds and modern technologies, in order to ensure food productivity, availability, accessibility and affordability; Montana’s Department of Agriculture, on the other hand, has recently announced a grant funding worth around USD 7.5 million, whose objective is to assist small and medium-sized meat processors in recovering from the effects of the coronavirus pandemic.

    Philippines’ Socioeconomic Planning Secretary underlines need to support farmers

    To ensure an adequate food supply amid possible future coronavirus lockdowns, the Philippines’ Socioeconomic Planning Secretary has recently highlighted the need to support the farmers’ access to disaster-resilient farm technologies, cold storage facilities and support for crop insurance and diversification. In order to achieve this objective, he brought the attention back to the “Plant, Plant, Plant program”, launched by the Department of Agriculture to enhance food security concerns amidst the country’s coronavirus disease outbreak, and projected to raise paddy production to 22.1 million tons.

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    Additional grant funding awarded to Montana’s meat processors

    Montana’s Department of Agriculture has recently announced that around USD 7.5 million in grant funding has been awarded through the Montana Meat Processing Infrastructure Grant programs (provided for by the Coronavirus Aid, Relief, and Economic Security Act), in order to assist small and medium-sized meat processors in adapting and advancing their infrastructure and capacity, and thus in responding efficiently to the Covid-19 crisis. More in particular, businesses received funding for additional cooler or freezer space, and for slaughter floor enhancements.

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    Stakeholder platform in Ghana is supporting cassava farmers and processors

    The Ghana Industrial Cassava Stakeholder Platform (an information hub for the country’s cassava value chain), with support from the Alliance for a Green Revolution in Africa, is building the capacities of its members (cassava farmers, processors, aggregators and input suppliers) and engaging in policy advocacy in order to make cassava a manufactured product in Ghana, rather than an imported one. As part of the activities to promote cassava as a strategic commodity, both electronic and print media were also used to reach out to the public.

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    REGIONAL FOCUS

    Rice production in Myanmar will benefit from the support of South Korea’s largest trading company and of the country’s Rural Development Administration, which will both provide equipment, raw materials, technical assistance and training to farmers in order to scale up production. Sugar production in the Caribbean, on the other hand, seems to be declining as countries like Belize, Guyana, Jamaica and Barbados do not have a sufficient refining capacity. The consequence is that only one third of the total sugar produced is used for consumption or manufacturing, while the rest is imported.

    ASIA – South Korea will support Myanmar’s rice farmers

    South Korea’s largest trading company and the country’s Rural Development Administration (RDA) will jointly support rice farmers in Myanmar by improving the commodity’s value chain (its variety, cultivation, processing and distribution). While the RDA will mostly provide uniforms and high-quality raw materials, the trading company will take charge of the processing and distribution processes for local rice. Furthermore, they will both provide training and technical assistance to farmers, in terms of cultivation techniques and post-harvest management technologies.

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    AMERICA – Caribbean countries seeking to supply regional domestic markets with sugar

    Despite the fact that sugar cane cultivation and sugar production have been going on in the Commonwealth Caribbean for around 370 years, there is still no modern refinery in Barbados, Belize, Guyana or Jamaica (the only four remaining Caribbean countries where sugar is still produced). There is still a substantial sugar demand for consumption by households and in manufacturing, but two thirds of all sugar consumed in the Caribbean is now imported. Those four countries are now seeking to supply the regional domestic markets, but they still have a low refining capacity and production is down in some of them (like Guyana and Jamaica).

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