The southern regions of China, which were hit by heavy rains and floods that caused severe damages to crops and infrastructures during the summer, are likely to be impacted by a typhoon in the coming weeks. Farmers in the Hainan province are taking precautionary measures to limit the negative repercussions on their activities.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
According to the weather forecasts, the Chinese province of Hainan will be hit by a typhoon in the near future. Due to the unfavourable weather conditions, the region has recently experienced frequent and heavy rains, which affected the production of melons and vegetables. The farmers in the Hainan province are actively responding to the adverse effects of the downpours, by covering the crops with mesh greenhouses, by digging trenches between soil ridges to drain water and by using specific products that prevent bacterial infections to which some crops are susceptible due to the continuous rainfall.
IMPACT ON COMMODITIES AND FOOD PRICES
The weather conditions in the key wheat producing regions of the world are still unfavourable, which has repercussions on global prices (that are currently driven by a robust demand): the continued dryness in Russia, for example, is fuelling concerns about crop emergence before the winter, and it has also been dry across the United States’ southern plains. In Uganda, on the other hand, the prices of tea and edible oils have recently increased and determined a hike in manufactured goods prices in the country. Finally, the disruptions caused by the coronavirus pandemic on the Chinese poultry supply chain are still driving chicken prices down, due to the oversupply of broilers and to a decreased domestic demand.
The prices in the world wheat markets have continued increasing last week, due to a strong global demand and to the continued unfavourable weather conditions in the key producing regions across the world. For example, the three US wheat bourses recorded their highest weekly close in more than five years on Friday, while Russian farmers continue to plant new season winter crops, despite the extremely dry conditions in the country.
According to Uganda’s Bureau of Statistics, the main drivers to the increase in the prices of manufactured products in the country is the rise in the prices of food products: tea shot up by 11.6% due to a weaker competition and a high demand for the Ugandan tea leaves, while the hike in animal and vegetable oils prices was attributed to the increase in transportation costs. The prices for processed coffee and fish, on the other hand, saw a decrease due to a high supply of these products in Uganda.
Due to a weaker demand (that is still influenced by the consequences on consumers of the coronavirus pandemic), and consequently to an oversupply of chicken, broiler prices continue to fluctuate in China. However, after the price of chicken fell to CNY 2.57 per kilogram in September (last year, during the same period, prices were set at CNY 6.82 per kilogram), there have been signs of a stabilization recently.
Today’s media coverage highlights three initiatives for the modernization of agriculture and of the food sectors in the United States and in China: the International Finance Corporation has recently invested USD 22 billion in private companies such as Apeel Sciences, which used these funds to improve domestic supply chains and reduce food losses and waste thanks to the use of refrigeration in select markets in Asia, Africa and Latin America; a new study conducted by an American business development firm underlines that by 2029 the market for precision agriculture will reach a total value of USD 4 billion; a new traceability system in Beijing will improve food security for imported frozen meat, fish and seafood in the city.
A company that develops plant-derived coatings to keep agricultural products fresh is bringing its innovative food treatment and supply chain management services to distribution centres in select markets in Asia, Africa and Latin America. The objective of this initiative is to improve food security rates among farmers, whose crops are usually susceptible to the threat of spoilage. More in particular, the initial markets will be in Mexico, Costa Rica, Peru, South Africa, Kenya, Uganda and Vietnam.
An American business development firm has partnered with an international consulting and research company to produce a new study on earth observation technologies. According to its findings, the total addressable market for precision agriculture (which consists in supporting commercial agricultural supply chains by providing Earth observation-based solutions to farmers) is expected to reach USD 4 billion by 2029.
Due to the fact that coronavirus traces were spotted in imported food products, China will implement a new traceability system for imported frozen meat, fish and seafood starting from next month in Beijing. The “Beijing Cold Chain Food Traceability Platform” will be characterized by the assignment of codes to food products, which will be scanned at entry and exit to track the circulation of imported frozen meat and fish in the city.
The biggest fully integrated online brand in fresh fish and meat e-commerce in the world has recently raised enough funds to expand its activities to India and to Saudi Arabia.
The world’s largest online fish and meat store has proposed its plans to launch in Saudi Arabia and India, where it will enable sellers to directly source from the fishermen and farmers with its AI-powered supply chain and cold chain technologies. This was made possible by the fact that the fish and meat e-commerce brand has recently raised USD 121 million in Series C funding, and by the new habits of the consumers amid the coronavirus pandemic, that raised more safety concerns and drove up the demand for e-commerce products.