Food and Agriculture Organization of the United Nations
    FAO Data Lab

    News digest - 30.31/08/2020

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

    Peter Thiongo and a motorcycle driver is packing dried bananas that will be taken to a posh mill and grounded into flour.
    ©FAO/Fredrik Lerneryd

    FOOD CHAIN DISRUPTIONS

    Three different food chain disruptions in Europe, South Asia and Sub-Saharan Africa: a growing number of Covid-19 cases in some of the United Kingdom’s poultry slaughterhouses will cause the culling of at least 400,000 chickens with CO2 and argon due to labor shortages; in China, the consumers’ food habits are being limited by the central government’s plan to drastically reduce food waste (after successive natural disasters and the ongoing trade war with the USA have damaged the country’s food production); in Nigeria, unhealthy food storage and transportation practices risk causing serious diseases in the unsuspecting customers, which are drawn to food vendors due to the competitive prices.

    Growing Covid-19 cases in UK poultry processing plants

    At least 400,000 chickens will be culled in the United Kingdom, due to a rising number of Covid-19 cases in poultry processing plants, which are disrupting their regular operations: for example, 75 staff tested positive for coronavirus in a poultry slaughterhouse in Norfolk, and others have had to self-isolate in a processing plant in Scotland. The reason for this is that chickens are bred to grow so quickly that, if they are left to continue growing after reaching their slaughter weight (which is a possibility when there’s a labour shortage), they can barely walk or die of heart disease.

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    Unhygienic food practices cause harm to consumers in Nigeria

    Fruit sellers in Lagos use unhygienic means and unhealthy practices to store their produce before selling it to the customers: for example, vendors often buy unripe fruit and then use gutter water and chemicals (like calcium) to ripen mangoes and bananas. Furthermore, according to Nigeria’s National Agency for Food and Drug Administration and Control, many trucks that are previously used for transporting fertilizers and other agrochemicals are then used for the transportation of grains and other food commodities.

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    Anti-food waste campaign is limiting food habits in China

    China’s president launched an anti-food waste campaign as the country’s agricultural sector was hit by a series of natural disasters (African swine fever, Covid-19, severe floods). Since the call for China’s central government to reduce food waste lacked specifics, officials and citizens across the country are adopting drastic methods to tackle the issue: for example, Shanghai officials are asking residents to report food-wasting behaviours, and one restaurant in the southern province of Hunan asked diners to weigh themselves before entering in order to have appropriate meals.

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    IMPACT ON COMMODITIES AND FOOD PRICES

    While a hike in flour prices was the result of an arbitrary decision by the top flour producers in Nigeria, which are led by foreign companies, the increasing prices of fresh vegetable and fruits in Vietnam are caused by widespread logistical coordination and infrastructure issues, which also cause postharvest losses due to the degradation in quality and/or quantity of the foods between the harvest phase and consumption by consumers. In Australia, on the other hand, seasonal changes and a contracting demand from China determined a decrease in lamb prices.

    Top flour producers in Nigeria manipulate prices, affecting local bakers and consumers

    The leading flour producing companies in Nigeria are controlled by foreigners and collectively operate like a cartel, manipulating the prices of flour and preventing local bakers and pastry producers to have a say. Some of these flour mills, which are led by Indian and Greek companies, are allegedly taking advantage of their financial power to exploit local farmers and bakers (indirectly affecting consumers) by arbitrarily increasing flour prices. Such increase in prices (by almost NGN 4000) affect all flour-related products, such as semolina, pasta and wheat offal.

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    Heavy transport costs determine high prices for fresh produce in Vietnam

    Due to a poor logistical coordination and to high transport costs, the prices of fresh agricultural products in Vietnam are increasing. More in particular, the country’s cargo owners and logistics providers cannot agree on a common mode of transport for the produce that is suitable in terms of time and cost, and a general lack of infrastructure connecting producing areas to warehouses and processing facilities further aggravates the situation. For example, apples in Vietnam cost around VND 16 per kg (the second most expensive in South-East Asia), and logistics costs make up almost 30% of the total price.

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    Seasonal changes cause fall in Australian lamb prices

    According to the National Australia Bank, the recent fall in Australian lamb prices over the recent months was caused by the strong seasonal changes and the concerns around the resilience of the international demand. Furthermore, it is possible that there will be a further downside in the spring, as more supplies become available in that period, and the continued appreciation of the Australian dollar, compared to the weakness of the US dollar, is affecting China’s demand for the country’s resources.

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    COUNTRIES' RESPONSE

    Liberia’s Ministry of Agriculture has recently started implementing its Smallholder Transformation Agriculture Revitalization Project (funded by the World Bank), which aims at making smallholder farmers recover from the negative impacts of the coronavirus pandemic by improving the national production of cassava and rice. India’s government had a similar role in offsetting the negative effects of the pandemic on agriculture, as well as the private sector, which came up with different corporate social responsibility projects that put agricultural producers back on track. Brazil, on the other hand, is aiming at improving its halal food exports by enhancing the traceability of its halal products through blockchain technology.

    Liberia’s Ministry of Agriculture enhances cassava and rice production

    The coronavirus pandemic had a devastating effect on Liberia’s agriculture and food security levels. In order to offset the pandemic’s negative effects on the lives of the country’s smallholder farmers, the Ministry of Agriculture set up the Smallholder Transformation Agriculture Revitalization Project (STAR-P) by attracting USD 10.5 million from the World Bank. Last week, the Ministry began awarding the first contracts to nine entities in the cassava and rice sectors, in order to boost their capacities to produce various food products and help vulnerable citizens.

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    Government and private support allowed Indian farmers to survive the pandemic

    Over 120 million smallholder farmers in India had to struggle for agricultural inputs and market access after the country was hit by the coronavirus pandemic. However, thanks to an efficient government support and to the initiatives of many private companies, the crisis was well-managed. The corporate social responsibility programs implemented by private firms include the Free Tractor Rental Service (established by the world’s third largest tractor manufacturer by volumes) for farmers in three different states, and a number of outreach, awareness, intervention and support initiatives by the country’s leading agriculture company.

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    Brazil will improve the traceability of its halal products

    The Arab-Brazilian Chamber of Commerce (which promotes economic, social and cultural development between Brazil and 22 Arab-speaking countries) will shortly complete a blockchain project that aims at improving traceability and increase trust in Brazil’s halal food supply chain, by providing information about the country’s halal producers and verifying the authenticity of the manufacturers’ halal certificates for importers to ensure that products comply with the standards. This new blockchain system will be implemented inside halal meat processing plants, before involving logistics companies.

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    REGIONAL FOCUS

    Environmentally harmful activities are taking place in Africa and Latin America, in the form of plastic waste trade and deforestation: an industry group is lobbying to influence the US-Kenya trade negotiations in order to lead the African country to agree to more plastic waste imports despite its strict limits on plastics, while in Latin America there is a whole network which includes crime groups, shady businesses and corrupt government officials, that tries to conceal that a share of the cattle supplied to Brazil’s markets are fattened on illegally deforested Amazon land from buyers. In South Asia, the trade relationship between Vietnam and China is growing stronger despite the negative effects of the coronavirus pandemic.

    ASIA – Trade relationship between Vietnam and China keeps growing despite pandemic

    Vietnam has the largest dragon-fruit growing area in Asia and exports the fruit to many countries in the region, including Thailand, Indonesia, Malaysia and Singapore. However, China is the main exporting market for Vietnam’s dragon fruits, so that it is normal for Vietnamese dragon fruit growers to sell their produce to local traders who then sell the fruits to Chinese buyers. Since China is a key export market for other Vietnamese agricultural products, the two countries are seeing their trade relationship grow despite the coronavirus pandemic.

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    AFRICA – Fossil fuel companies seek to export more plastics to African markets

    Last year, the United States shipped more than 1 billion pounds of plastic waste to 96 countries, including Kenya. An industry group representing the world’s largest chemical makers and fossil fuel companies is trying to bring the US to reverse Kenya’s strict limits on plastics during their trade negotiations, in order to make the African country import more foreign plastic waste. However, Kenya would serve only as a starting point to supply US-made chemicals and plastics to other African countries.

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    AMERICA – Researchers map environmental crime in Latin America to halt deforestation

    Part of the cattle supplied to Brazil’s markets pastures on illegally deforested Amazon land, and to hide this from buyers, the animals are often passed through many intermediaries before being sold, making it hard for them to ensure their supply chains are deforestation-free. Such networks expand beyond Brazil’s borders, including countries like Bolivia, Ecuador, Guyana, Suriname and Venezuela. In order to track these regional illegal activities and identify common patterns, researchers are developing a live digital map of incidents.

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