Food and Agriculture Organization of the United Nations
    FAO Data Lab

    News digest - 15/07/2020

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

    Mindelo market worker puts tuna fish on a bench to be prepared
    ©FAO/Luis Costa

    FOOD CHAIN DISRUPTIONS

    Two less considered food chain disruptions that the coronavirus may determine: the reduction in the quality and frequency of food safety controls, or the lack of inspections and enforcement of regulation across the world, which increase the risk of food fraud (especially for dairy products and milk), that could be anything from relabeling out-of-date items to substituting ingredients; the increased rate of maritime casualties, due to the enhanced difficulties in carrying out frequent crew rotations and inspections and the heightened freight rates, which could both hamper food maritime transport.

    Coronavirus has ‘catastrophic’ food fraud implications

    The pandemic put the global food supply chain under a lot of stress, hampering transport, labour and production capacities. This also had a negative impact on food quality, and raised concerns about the possibility to maintain a sufficient food safety assurance during this crisis. In fact, both the manufacturing and the supply of food and beverages may not be policed vigilantly, leading to the possibility of a food fraud. This encompasses different consequences, including the substitution of ingredients or relabelling out-of-date items. 

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    La crisis del coronavirus puede disparar la siniestralidad en el transporte marítimo

    Over the years, less and less maritime casualties have been recorded, and they were at an all-time low in 2019 (just 41 casualties involving large vessels; 20% less than 2018 and 70% less than 2009). However, the international crisis triggered by the coronavirus pandemic could skew the figures, according to Allianz (the German multinational financial services company). Maritime transport is fundamental to move bulk cargo items such as food staples, but it could be seriously hampered by the consequences of the pandemic: crew rotation difficulties (leading to an increase in human errors), low maintenance, fewer surveys, higher freight rates, and so on.

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    IMPACT ON COMMODITIES AND FOOD PRICES

    China is seeing its food prices rise in the wake of the coronavirus pandemic, due to the fact that the supply side is not managing to keep up with an increased demand, and because of the severe floods in the northern and central parts of the country, that have killed at least 150 people and caused heavy economic losses. More in particular, pork prices have more than doubled over the last 18 months, because of both the coronavirus pandemic and the African swine fever. China is also limiting its imports of barley from Australia, which has brought the latter to consider a diversification of its export market.

    Floods and the coronavirus create more uncertainty for China as food prices climb

    In the wake of the coronavirus outbreak, China has to deal with increased food prices (which were 11.1% higher in June than a year ago) due to the parallel supply decrease and demand increase prompted by the pandemic, thousands of closures of food and beverage-related businesses (which outnumber the new registrations in the industry), and severe floods, which have been described as the worst since 1998. The economic losses caused by such floods amount to CNY 86 billion.

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    Coronavirus Has Americans Hooked on Canned Tuna, and Producers Are Playing Catch Up

    There has been an increased demand of canned fish ever since the start of the coronavirus lockdown in the United States, due to the fact that they represent a cheap source of proteins, and now the producers are struggling to keep up with it. So far, the companies have managed to keep the retail prices of canned tuna stable; however, the average wholesale prices for tuna increased by 41% in May due to border restrictions and fishing-port closures, while because of a plummeting demand from restaurants, the prices of other seafood were decreasing.

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    Tariff shocks highlight need to diversify grain export markets

    The recent import restrictions imposed by the Indian government on Australian chickpeas and lentils and by the Chinese government on barley, exposed the need for the country’s grain industry to increase its market diversification to spread its export risk. This is particularly important for Australia, because exports account for around 70% of the country’s total annual grain production (mainly barley, pulses and canola) for a total value of AUD 11 billion.

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    COUNTRIES' RESPONSE

    The coronavirus pandemic has exposed different issues that connect the global food industry and agricultural sectors to the safety of the environment. For example, it clearly showed how biodiversity losses have increased the world societies’ vulnerability to virus outbreaks, and how important it is for food systems to be efficient and well organized. Taking some steps toward a modernisation of agriculture could be fundamental to start tackling such issues: recently, the USAID has contributed to the creation of a new agricultural supply chain innovation centre in Ghana, while a programme developed by the European Commission plans to halve the use of pesticides and reduce that of fertilizers by 2030.

    Uganda: Local Content Bill to Promote Import Substitution

    The Local Content Bill, which is yet to be assented by the President of Uganda, Yoweri Museveni, aims at ensuring that specific goods (such as coffee, cotton, maize, mangoes, onions and groundnuts) are exclusively procured from within Uganda, in order to build local capacities and create jobs. This bill would also benefit the private sector, as it may enhance the country’s exports and reduce the imports, and Uganda’s economy at large, because it would contribute to the objective of increasing the country’s self-reliance by increasing the number and variety of opportunities.

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    USAID announces $15 Million for an Innovative Training Center for Supply-Chain Management in Africa

    The US Agency for International Development will provide UDS 15 million to support the development of the new Center for Applied Research and Innovation in Supply Chain-Africa to improve local supply chains in Ghana, particularly in health care and agriculture. The new center will establish a source of expertise on the sustainable management of the supply chains, drive innovative research and training (particularly for women), and connect African businesses and researchers to global resources.  

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    Why American Agriculture Could be in for Big Changes

    Prompted by the coronavirus pandemic, the European Commission has recently announced a plan on the transformation of Europe’s agriculture, which could have repercussions on the activities of the American growers. The plan will increase organic farming from the current 8% to 25% by 2030, drastically reducing the use of pesticides and fertilizers. The US growers that currently export products to Europe may face more difficulties in the future, as this plan could prioritize locally produced food and thus shorten the food supply chain.

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    REGIONAL FOCUS

    Today’s media coverage highlights two major developments in Africa and in the Middle East: the Alliance for a Green Revolution in Africa approved a set of resolutions that are supposed to tackle increasing food security concerns in Nigeria, as the country’s population will double by 2050; Lebanon took a step forward strengthening its relationship with China to the detriment of its ties with the United States, in order to attract investment and ease the electricity crisis that added to the current economic and political crisis that are shaking the country.

    AFRICA – Securing the 2020 cropping season amid COVID-19 Pandemic

    During a recent webinar organized by the Alliance for a Green Revolution in Africa, resolutions were made to create a pathway to build a resilient agriculture sector post COVID-19, which will include the introduction of a tech-based communication network among all stakeholders and the distribution of a stimulus package to farmers. Such a strategy could also tackle food security issues in Nigeria, whose population is projected to reach 402 million people by 2050.

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    ASIA – Líbano recurre a la ayuda de China en medio de una crisis económica y política

    Lebanon, which is facing a serious political and economic crisis, turned to China with the purpose of attracting investment, even at the cost of neglecting its ties with the United States. In the last few months, the value of the Lebanese pound dropped, and food prices grew vertically, while the negotiations with the International Monetary Fund ended in a stalemate as Lebanon failed to implement economic and anti-corruption reforms. China offered to support the creation of new power plants, which would at least ease the electricity crisis in Lebanon.

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