Food and Agriculture Organization of the United Nations
    FAO Data Lab

    News digest - 09/07/2020

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

    Bananas at Juliana Sagilai's banana farm, in Kenya
    ©FAO/Fredrik Lerneryd

    FOOD CHAIN DISRUPTIONS

    The COVID-19 pandemic represented an unprecedented disruption to the world trade, as unnecessary export restrictions and other trade barriers were raised by some countries. This had a considerable impact on food-importing countries, which depend on the external supply of specific commodities that they can't produce locally. In this regard, the founder of a firm that creates meat substitutes from microalgae recently emphasized the importance of providing funding for agri-food technology development, which is minimal, if compared to the investments in communications technology (USD 19.8 billion against USD 4 trillion in 2019). In fact, food and agriculture technology provides additional means for food-importing countries to produce food internally and improve their self-sufficiency.  

    World Bank: Food Security and COVID-19

    Many countries and international organizations are taking special measures to protect agriculture and keep it running to face food security issues related to the spread of the coronavirus and allow the consumers to be able to have access and purchase food products despite job losses and trade restrictions. More in particular, the latter can be particularly disruptive for food-importing countries, and this is why the World Bank has recently called for a collective action to keep the food trade flowing. Another source of danger for food security is represented by the lack of agricultural inputs like fertilizers and seeds, which could diminish next season’s crop.  

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    COVID-induced food insecurity has exposed underinvestment in food tech

    Investments in agri-food technology (that improve agriculture and food production) could have eased the food security issues that are emerging in different parts of the world as a result of the coronavirus pandemic. The investments in this sector dropped by 5% last year, while those in information technology, for example, amounted to USD 4 trillion. By enhancing funding in agri-food technology, more food could be produced locally and some of the food-importing countries could lessen their dependence on food-exporting countries (during the most acute phase of the pandemic, the trade restrictions between Singapore and Malaysia prompted a wave of panic buying in Singapore).

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    IMPACT ON COMMODITIES AND FOOD PRICES

    China is the world’s biggest pork producer and biggest market for bear. However, the country’s hog herds have been devastated by the African swine fever and pork production is expected to decrease by 33% during 2020, and China is also imposing heavy protocols on imported meat to contain the spread of the coronavirus. Furthermore, the country is currently engaged in a trade dispute with Australia, which officially originated from the fact that four Australian farming businesses were accused of dumping wheat, barley and canola (selling them at a lower price overseas than the official internal price), and is now interested in importing barley for its beer from Canada. Finally, China is expected to import bananas from Vietnam and Cambodia, which record fewer COVID-19 cases than the Philippines.

    Philippines: Banana exporters may lose Chinese market to Vietnam

    The Philippines are one of the most affected countries by the coronavirus pandemic in Asia. The president of the Pilipino Banana Growers and Exporters Association has recently stated that there’s a concrete risk that China, which is the biggest export market for the countries’ bananas and has been applying rigid quarantine protocols for imported products, may choose to import the fruit from Vietnam and Cambodia during the next months, because these countries reported fewer COVID-19 cases. Therefore, banana exports from the Philippines are projected to decline by 20% this year.

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    China’s slower meat imports seen worsening protein shortage

    China imposed strict quarantine protocols also to imported meat. Following the outbreak of African swine fever that devastated the hog herds throughout the country, domestic production decreased by 30%: therefore, China now has the contrasting needs to import more pork and other meat while applying effective anti-contamination measures that could reduce imports. In turn, this may determine a surge in domestic prices, while heavy rainfalls and floods could hamper hog delivery in southern China.

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    Canadian barley exports surging on booming demand from China for beer

    Since China is still engaged in a trade dispute with Australia (the country’s usual supplier of barley), which was accused of dumping agricultural products, Canada is projected to fill that gap during the last three months of the year, because barley is normally harvested in the late summer. China is particularly interested in importing barley from Canada as the former is the world’s biggest market for bear, while Canadian barley is rich in protein.

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    COUNTRIES' RESPONSE

    In the absence of state agricultural fairs and conventions, a group of 11 agricultural associations will organize different town hall discussions during the summer in the United States, that will focus on proposing solutions around the issues the US agricultural sector is facing around international trade and competitiveness. In Australia, some of these suggestions are materialising in the form of different projects funded by the Ministry of Agriculture’s Traceability Grants Program. This initiative is part of the government’s Modernising Agricultural Trade agenda, which will support the objective of raising the total value of the country’s agricultural sector to AUD 100 billion by 2030.

    Ag supply chain traceability upped to keep Australia ahead

    Australia’s Ministry of Agriculture recently stated that 16 different projects are sharing in the funding under the first phase of the Government’s AUD 7 million Traceability Grants Program. The 16 successful applicants are developing technologies that will boost traceability in the food supply chain, and therefore such initiative will provide additional guarantees about the safety and quality of the agricultural products to the country’s consumers and trading partners. For example, one of the projects will create an app that allows for a real-time tracking of livestock from the farms to their final destination.

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    Major ag groups to launch town hall series on the future of agricultural trade and supply chains

    In the United States, a group of agricultural associations, including the US Dairy Export Council and the National Association of State Departments of Agriculture, recently announced that they will launch a series of town hall discussions on the future of agriculture in the country, in order to find concrete solutions to the challenges the agricultural sector faces on international trade and competitiveness, which are now hampered by trade war and the impact of COVID-19.

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    REGIONAL FOCUS

    This year’s ENCOVI national survey on living conditions, created by three different universities in Venezuela, reports that infant mortality levels returned to the levels of the 80s, when the country recorded 26 deaths per 1000 live births. Furthermore, more than 500,000 families live in huts, one out of four households have running water and almost 90% of all adults are worried that they will not be able to provide food for their families. Poor living conditions and massive youth migration determine a low productivity, which makes Venezuela unable to be self-sufficient. Most African countries that face similar difficulties are focusing on improving their local productivity and resilience, and this is why this is a good opportunity to support the success of the African Continental Free Trade Area.

    AFRICA – Will Trade be the same after Covid-19?

    The coronavirus pandemic has put considerable strain on logistics, and companies have realized how destructive bottlenecks and a limited workforce capacity are for shipping and receiving products on time. However, many African countries are starting to prioritize local production in order to build up resilience and increase their self-reliance, and the African Continental Free Trade Area provides a great opportunity to mitigate logistical issues. Furthermore, not all industries were negatively affected by the coronavirus pandemic: the hospitality sector took a huge blow, while technology services providers have experienced a significant growth.

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    AMERICA – Venezuela ya es el país más pobre de América

    This year’s ENCOVI national survey on living conditions (Encuesta Nacional de Condiciones de Vida) in Venezuela included two new sections: one about the effects of the coronavirus pandemic, and the other on the consumption of flour, rice, eggs and meat according to each socio-economic class. The survey highlights an increased level of food insecurity when compared to the 2018 ENCOVI national survey, with 87% of all adults worried that they will have nothing to eat at home. The Permanent Representative of Cuba to FAO has recently focused the attention on a similar situation in Cuba.

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