The coronavirus pandemic has given an unexpected advantage to Kenyan fish farmers, due to the fact that it limited China’s ability to export this commodity to Kenya in the same quantities as in 2019 (Chinese fish exports have decreased by almost 50% in 2020). Kenya has strengthened imports from Uganda, but it also used a loan from IFAD to boost the domestic fish production. In Honduras, on the other hand, the agricultural producers were affected by the consequences of Hurricane Eta, but the country’s supply of poultry products was not excessively impacted by the extreme weather phenomenon. Finally, for what concerns the United States, a new study has recently revealed that the coronavirus pandemic (like any other economic crisis) has impacted on the country’s water usage in food production and agriculture.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
Due to the global supply chain disruptions caused by the coronavirus pandemic, China’s fish exports to Kenya have decreased by almost 50% during the last nine months (from KES 2 billion in 2019 to around KES 993 million in 2020). This resulted in two consequences: Kenya has turned to Uganda as its main customer, and it took advantage of a KES 14 billion loan from the International Fund for Agricultural Development (IFAD) to support local fish farmers and strengthen its domestic production.
Hurricane Eta was a Category 4 hurricane that killed at least 182 people and left 116 missing across Central America. In Honduras, the hurricane also caused considerable damages to agriculture and to transportation infrastructure: agricultural producers were mostly affected by the fact that they lost access to farms and internal roads. However, according to the country’s National Association of Poultry Farmers, Honduras has sufficient supplies of chicken meat and eggs.
A new study conducted by the University of Illinois has analysed water withdrawals in food production and agriculture in the United States. The main takeaway of this research is that water use recorded a decline in recent years: more in particular, the coronavirus pandemic is one of the factors that is affecting water usage in the country, just like any other economic crisis (for example, the 2008 recession resulted in a decrease water usage, too).
IMPACT ON COMMODITIES AND FOOD PRICES
China’s imports of grains and oilseeds have become a larger part of world seaborne trade in these commodities over the past decade, and the annual volumes have more than doubled recently: in the 2019/20 marketing year (which ended on September 2020), the US Department of Agriculture recorded that China imported 121.5 million tons of grains and soybeans (26% more than the previous marketing year), and these imports are likely to keep trending upwards during the next marketing year. In Bangladesh, on the other hand, a hike in potato prices has also determined an increase in the prices of seed potatoes, which are out of reach for Bangladeshi farmers.
The Chinese media have recently reported that China will try to renegotiate the Phase One Trade Agreement with the United States in 2021, under the new Administration: more in particular, according to the analysts, China will aim at reducing the dollar amount that it is committed to, or switch it to a volume for grains. Meanwhile, the demand for bulk carriers in the global grain and soya trades keeps receiving a boost from the rising China imports, which are likely to remain stable into 2021.
The high prices of potatoes continue to hurt household budgets in Bangladesh, and farmers are also bearing the brunt of a hike in the prices of seed potatoes. In fact, due to low prices last year, many farmers had reduced the acreage for the tuber crop, which determined that a substantial quantity of seed potatoes got damaged in cold storage; however, now potato prices are higher, and farmers are showing interest in cultivating the crop.
Last week, more than 180,000 people were evacuated in the Philippines as another typhoon (that was equivalent to a Category 2 hurricane) battered the Luzon island, causing flooding and two to three meters of storm surge. In order to support farmers that incurred several economic losses, the country’s Department of Agriculture has allotted PHP 6 billion that will be used to provide emergency interventions. In Guatemala, on the other hand, a non-governmental organization is currently working to assist rural communities in preventing and mitigating malnutrition, while the Rural Electrification Agency in Nigeria provides safe and reliable electricity to hundreds of households in isolated villages.
Luzon (the largest island in the Philippines) was recently hit by a series of typhoons, which brought the local authorities to declare the state of calamity in the region. The country’s Department of Agriculture (DA) has allotted PHP 6 billion to provide emergency interventions in the agriculture sector (which has already incurred losses totalling around PHP 11 billion due to the damages caused by the typhoons) and made sure that the prices for specific agricultural and fishery commodities will remain reasonable.
A non-governmental organization is currently working towards the mitigation and prevention of malnutrition in Guatemala (one of the countries with the highest chronic child malnutrition rates in the world), by providing poor households with family hygiene kits, food supplies and a facilitated access to safe water, and by implementing initiatives for inclusive livelihood promotion in disadvantaged rural and urban regions of the country.
The Rural Electrification Agency (REA) is a federal government body that is currently aiming at providing Nigeria’s poor communities with off-grid power. For example, under the Nigeria Electrification Project the agency has connected 364 households to solar power and inaugurated two solar hybrid mini grids in in the state of Bayelsa, providing safe and reliable electricity to entire villages and spurring economic growth in the communities.
The African leaders are currently urging the European Union to include specific measures in a new EU-Africa partnership that facilitate the access to the EU funds for the African countries, and that stimulate the imports of finished goods from the continent. In Southeast Asia, on the other hand, several environmental non-governmental organizations are asking the new United States’ President-elect to work with the Congress to pass regulations that address the US imports of commodities sourced from deforested land, just like the United Kingdom and the European Union, which are moving to tighten oversight of supply chains.
The European Union has recently reiterated its commitment to lay the ground for a new EU-Africa partnership to support economic growth in the continent. However, the prerequisite for such new partnership is the solution to long-standing tensions between the EU and the African Union: for example, the African leaders demand that the new partnership will entail increased exports of finished goods from Africa (instead of raw materials) and a facilitated access to the existing EU funds.
The election of a new president in the United States has raised expectations in environmentalists that protecting Southeast Asia’s rainforests will get more attention in Washington: in the region, much of the rubber, sugar, rice and palm oil that is responsible for large swathes of deforestation is currently ending up in the export market, so that several non-profits have urged the new President-elect to pass regulations addressing US imports of commodities sourced from illegally cleared land.