Food and Agriculture Organization of the United Nations
    FAO Data Lab

    News digest - 16/07/2020

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

     Jose Luis is the grandfather of Dulce Marí­a and her two brothers, Alex (7 years old) and Sofía (5 years old). He is dedicated to the work of the field, also works as a mechanics and transport of merchandise.
    ©Pep Bonet/NOOR for FAO


    Between March and May, the US’ food industry was shaken by a sudden decrease in demand for food in restaurants and a corresponding increase in demand for food in grocery stores, which quickly led to hoarding behaviors among the consumers. This, and the shutdown of most of the meatpacking plants in the country (which are responsible for about 60% of all cattle and hogs processed), determined a supply shock in the US. The underlying cause of this shock was a failure to predict consumption patterns, and this is why focusing on AI development would benefit the food supply chain management.

    Pandemic disruptions: Impacts on ag markets, health care

    In March, a simultaneous move of demand for food away from restaurants and increase in demand for food at grocery stores was followed by panic buying and supply shortages in the US, which led to a supply shock between April and May, also due to the shutdown of many meat processing plants in the country. While beef and pork prices grew rapidly, chicken prices have remained stable. The coronavirus pandemic also influenced the forestry and wood products industry, and especially pulp wood demand (mainly because of toilet paper hoarding during the earliest phase of the pandemic).


    How might Covid-19 affect food supply chains?

    During the last months, the food supply chains proved vulnerable to consumer stockpiling and panic buying, especially in the UK and the US, but the real issue exposed by the coronavirus pandemic was a failure in predicting consumption patterns and in mitigating such phenomena. Therefore, this crisis highlights the importance of focusing on digitalisation in the supply chain management, and on the application of artificial intelligence, more in particular. Developments in this regard would improve our resilience to further waves of the current pandemic, and to future crises.



    Three developments in cereal grains production and exports in Asia and America: Pakistan successfully avoided another flour crisis (by waiving off all duties and taxes to wheat imports), which was expected to hit the country due to a lack of proper planning and a missing wheat procurement from the western provinces of Balochistan and Khyber Pakhtunkhwa; in America, the US sold a record quantity of corn (the biggest since 1991) to China under the US-China Phase 1 trade deal, while Brazil’s wheat production experienced a setback due to a disadvantageous weather in the country’s major wheat producing states.

    Over 6.700 million tons of wheat available for local consummation

    Pakistan’s Ministry of National Food Security and Research announced that there is not a dearth of wheat in the country anymore, as abundant wheat stocks of over 6700 million tons are available to fulfil the domestic needs for grains and flour. This comes after some serious concerns that the country could have been moving towards another flour crisis: thanks to the Economic Coordination Committee’s decision to import quality wheat for an unlimited period by waiving off all duties and taxes, this possible occurrence has been avoided.


    U.S. corn to challenge export record to China in 2020-21

    The US-China Phase 1 trade deal requires substantial exports of corn and other US agricultural goods to China: in fact, the US Department of Agriculture recently confirmed that the latter has purchased around 1762 million tons of corn to be delivered in the 2020-21 marketing year (which will begin in September). It is the largest daily US corn sale to any country since 1991, when the Soviet Union bought around 3.72 million tons, one day after it was granted a USD 900 million export credit to purchase US commodities.


    Brazil corn, wheat production remains steady

    Brazil’s wheat production experienced a slowdown caused by an adverse weather in Paraná and Rio Grande do Sul, the country’s two major wheat producing states. Furthermore, according to a report issued by the US Department of Agriculture, a future disadvantageous weather is projected to keep Brazil’s corn and wheat production firm (resulting in a decrease of corn exports by 16%, compared to last year), while rice production is expected to increase.



    The United States and the European Union are following two parallel tracks towards innovation in the food supply chain: the US FDA, after a five-month delay caused by the coronavirus pandemic, has officially announced its New Era of Smarter Food Safety Blueprint, which focuses on increasing traceability in the food safety system by using AI, machine learning and blockchain; the EIT in Europe, on the other hand, has recently granted EUR 790,000 to five research institutions in order to support the creation of an automated testing device to be installed in food processing facilities, that is capable of quickly detecting the presence of the coronavirus on the surfaces.  

    US FDA Considers Blockchain for Food Security

    The US Food and Drug Administration recently released a pilot study that highlights blockchain as a valuable option for some of the identified challenges for food safety. Such a technology could make it easier to trace products through the supply chain, and may also have an impact on prevention and outbreak response and on retail modernization. IBM (the American multinational technology company) already laid the groundwork when it developed the Food Trust initiative, which developed a shared record of food system data with its participants.

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    Rapid detection of coronavirus on food processing surfaces enabled by EU funding

    The European Institute of Innovation and Technology is an independent body of the European Union that was created in 2008 to strengthen Europe’s ability to innovate. Through its leading initiative, EIT Food (which aims at making the food systems more sustainable and trusted), the Institute has recently granted EUR 790,000 to five European companies and research institutions as part of the COVID-19 Rapid Response Call for Innovation projects. This funding will support the creation of a platform that will assist food companies in detecting the presence of the coronavirus on food processing surfaces.



    Ghana needs a special Agriculture Sector Investment Fund

    The Peasant Farmers Association of Ghana and the Social Enterprise Development Foundation both urged the country’s government to set up an agriculture sector investment fund to make a further step towards ensuring food security. An official financial structure for the sector would serve as a financial reservoir for farming activities, and would improve the efficiency of extant agricultural interventions in Ghana (such as the subsidy on fertilizers).



    The Spanish State Secretariat for Trade and the Development Bank of Latin America have recently signed a memorandum of understanding to jointly fund the implementation of various health, education, agriculture and infrastructure development projects in Latin America. Meanwhile, a recent report exposed the fact that migrant agricultural workers work under sub-standard conditions also in the Northern EU member states. Therefore, the undeclared and exploitative migrant labour in the agricultural sector is not only present in Southern European states, such as Italy, Greece and Spain.

    EUROPE – Agro Food Tech Europe Digital Expo to Kick Off July 20

    The Agro Food Tech Europe Digital Expo is a digital fair devoted to food, food packaging and agricultural technologies. This year, it will focus on innovative solutions to the global food supply issues posed by the coronavirus pandemic.



    EUROPE – Are agri-food workers only exploited in Southern Europe?

    A combined report recently issued by the Open Society European Policy Institute and the European University Institute’s Robert Schuman Centre for Advanced Studies highlights that the sub-standard working conditions the migrant workers in the agricultural sector are subject to are present not only in Southern European countries, but also in Northern EU member states, such as Germany, the Netherlands and Sweden.



    AMERICA – La Secretaría de Estado de Comercio española y CAF promoverán el desarrollo de proyectos sostenibles en América Latina

    The Spanish State Secretariat for Trade and the Development Bank of Latin America (Corporación Andina de Fomento) signed a memorandum of understanding that paves the way for a collaboration in funding development projects in Latin America. The programmes will cover many sectors, including infrastructure, agriculture, health and education, and it has the objective of encouraging business development between Spain and Latin America, and supporting the internationalization of the Spanish businesses.