General considerations concerning food chain disruption-related news

During the month, the mentions to developing countries in the newspaper articles that were selected for the Data Lab’s daily news digests largely outnumbered the mentions to developed countries (105 mentions against 63 mentions). The only food value chain stage that was exclusively mentioned in relation to developing countries was Market. Newspaper articles mentioning developing countries and highlighting food chain disruptions that occurred in the Transport, Storage, Producer, Export, Consumer and Distribution stages were more numerous, if compared with articles focusing on disruptions occurring in the same stages, but in developed countries, while the disruptions that were more frequent in developed countries corresponded to the Retail, Restaurants, Processing and Harvest stages.

Producers struggling in Sub-Saharan Africa and South Asia

Most of the newspaper articles describing food chain disruptions occurring in the Producer stage made reference to Sub-Saharan African ad South Asian countries (combined, they received 25 mentions out of 30). More in particular, the Nigerian and Kenyan producers were the most affected: in Nigeria, the leading flour producing companies operate like a cartel, manipulating flour prices and preventing bakers and pastry producers from having a say, and taking advantage of their greater financial power to exploit local farmers and bakers. This and other factors (such as the effects of the coronavirus pandemic and the duties on wheat imports) affected flour prices, which sharply increased in mid-September.

     The most affected producers in Kenya during the month, on the other hand, were dairy producers and coffee, grain and banana farmers. Milk production in the country suffered from the unusual cold weather (normally seen between June and July), which stressed dairy cattle and caused a 36% decrease in milk volumes. Grain farmers, on the other hand, were impacted by the prolonged decision by the country’s government to shut all bars in Kenya as part of the measures to limit the spread of the coronavirus pandemic (barley, sorghum and wheat are normally used to produce beverages), while banana growers have been struggling to find a market for their products.

     Finally, the most affected producers in South Asia during the month of September were the Indian, Vietnamese and Bangladeshi rice producers, and the Indonesian and Malaysia palm oil producers. The pandemic-induced disruptions curtailed rice supplies in India and Vietnam, while several consecutive natural calamities in Bangladesh (including intense rainfall, floods and a cyclone between March and July) damaged the crops and determined an increase in domestic prices by 20%. Heavy rains also determined a decrease in palm oil production in Indonesia and Malaysia, which led to a hike in prices.

Food producers and exporters experiencing difficulties in developed countries

All of the mentions to food producers experiencing issues in developed countries made reference to the countries of the English-speaking world. In the United States, pork prices remained low for most of the summer in Minnesota, affecting hog farmers, while a new invasive pest (the brown marmorated stink bug) began ravaging vegetables, fruits, nuts and row crops in Florida toward the end of August. Furthermore, the US seafood industry was further damaged by Hurricane Laura, which hit Louisiana, among other states, after the lockdown measures had already affected this sector by causing closures in the hospitality industry. Finally, the hundreds of wildfires that destroyed around 600,000 hectares of land in California represented an additional challenge for the state’s farmworker community.

     Most of the newspaper articles related to Australia and New Zealand, on the other hand, mainly focused on exports. The trade relationship between Australia and China hit its peak in 2019-20, after 14 years during which the former has mostly relied on a single overseas market for its exports. More recently, China’s sanctions against key farm imports from Australia (such as beef, wine and barley) were allegedly used as a lever to force the country to withdraw some of its criticisms on the way China handled the first coronavirus outbreaks. This is forcing Australia to identify new markets for its agricultural and food exports, such as India, Bangladesh, Vietnam and Indonesia (which already imports large quantities of barley, wheat and sorghum from the country). For what concerns New Zealand, on the other hand, the country saw a contraction of its tomato exports, caused by the fact that farmers delayed the planting of tomato crops in April, when many restaurants were forced to shut down by the country’s government, which resulted in a supply shortage and also in a hike in tomato prices.

     Finally, with the intensification of the negotiation talks between the United Kingdom and the European Union, before the Brexit transition period ends in late December, many newspaper articles offered insights on the future of the trade relationship between the two parties, and on the consequences on exports and consumer prices. More specifically, several groups representing road haulers and a report by the London School of Economics and Political Science warned the UK’s government about severe supply chain disruptions after the end of the transition period, caused by new tariffs and border controls, which will eventually impact on food prices.

Maize production and trade

Maize was one of the most mentioned commodities during the month, together with wheat, rice and fruits. Maize was mostly mentioned in reference to East and South-eastern African countries, and in connection to the trade relationship between the United States and China. More in particular, the newspaper articles highlighted favourable maize harvests in Malawi, Mozambique and South Africa (despite the high food insecurity levels in these countries), which corresponded to an increase in maize exports from South Africa, and especially to Zimbabwe, whose maize stocks are normally low toward the end of the year. However, the government of Zimbabwe undertook to tackle the recurrent shortage of maize supplies by devoting 1.5 million hectares of land for the cultivation of maize through a summer cropping program that was funded by public and private entities.

     The United States was the most mentioned country in relation to maize, and especially for what concerns trade with China, which saw its maize supplies decrease (and prices increase) at the beginning of the month due to several factors (including the continuing pork shortage, a drought in the north and the floods in the south). In fact, as part of the US-China Phase One trade deal, the country has pledged to make record US agricultural purchases this year (including maize).

Rice and fruit production and trade in South Asia

Fruit and rice were mainly mentioned in reference to developing countries, and more in particular to South and Southeast Asian countries like India, Bangladesh, Vietnam, Thailand and Myanmar. For instance, towards the end of August, Bangladesh’s ministry of food had to reassess the rice stocks in the country, after the soaring prices of this commodity (caused by several natural calamities that ravaged the rice crops in the country) took the authorities by surprise. India and Vietnam faced similar concerns, due to the pandemic-induced disruptions that determined a reduction in supplies and an increase in domestic and export prices for rice. Furthermore, both India and Pakistan were confronted with unfavourable weather events and pests damaging apple and peach orchards in mid-September.

Issues related to wheat production and storage in Europe and Pakistan

Wheat was also one of the most mentioned commodities during the month, in newspaper articles related to both developing and developed countries. Toward the end of August, Pakistan was still facing a severe wheat and flour shortage, so the provincial government of Balochistan (one of Pakistan’s four provinces) had to set up many stalls in difference parts of the city of Quetta to sell flour at affordable prices. However, wheat prices continued to increase: the official figures of the Pakistan Bureau of Statistics showed a further rise by 2% in mid-September, because only two provinces managed to have access to additional wheat imports. However, an allegation of collusion between importers pushed the country’s federal government to scrap a tender for the import of 150,000 tons of wheat, temporarily stopping its plan to purchase 1.5 million tons in order to ease the wheat shortage that is still affecting the country.

     In Europe, on the other hand, an unfavourable weather determined a low wheat production in France (which witnessed a 25% fall year-on-year due to drought) and the United Kingdom (where the heavy rainfall disrupted the sowing process), while Germany and Poland recorded stable levels of production in early September. As a consequence, wheat exports from the European Union were considerably lower than last year (down 47%). The United States also witnessed one the smallest wheat crops in years, but wheat futures remained stable thanks to the huge volumes of this grain produced in Russia and China, which held the prices lower.

Infrastructure development in Sub-Saharan Africa

During the month, several newspaper articles mentioned the efforts made by different developing countries’ governments (a total of 11 mentions) to make improvements to their infrastructural systems. Most of them were Sub-Saharan African countries, such as South Africa, Nigeria, Tanzania, Zambia, Zimbabwe and Malawi. More in particular, the Julius Nyerere Hydropower Project will create a hydroelectric dam along the Rufiji River (in Tanzania), which is expected to produce around 2,115 megawatts of electricity upon completion, while the Oxfam International Zimbabwe’s Climate Change Adaptation for Rural Livelihoods Program will set up solar-powered community irrigation systems in parts of the country that chronically suffer from droughts, flash floods and food shortages, in order to help rural women and youth achieve income security through the sale of horticulture products.

     In Nigeria, on the other hand, towards the end of August a logistics company that operates in six African countries was addressing intra-African trade network challenges such as decrepit railroads, outdated road systems, onerous duties and corrupt bureaucracies by constantly collaborating with the central government, which developed strategies to facilitate the free movement of food and agricultural inputs in and out of the country. Moreover, the Nigerian government undertook to boost the production of fertilizers, in order to improve the agricultural productivity and reduce its reliance on food imports.

     Finally, the European Union has funded several investment projects that target rural areas in Sub-Saharan Africa that are affected by water shortages. In Malawi, for example, the “Watersproutt” program aims at ensuring all households have access to safe water, by developing solar disinfection and ceramic filtration units to treat water at household level. The EU also supports the reconstruction of damaged water supply networks in Zimbabwe, and participates to a water and sanitation initiative in Zambia that sets out to achieve 100% access to clean water provision in the country by 2030.

Technological improvements in South Asia and Oceania

Among the news detailing technological improvements in the food industries and agricultural sectors of developing and developed countries during the month, those related to India, China, Indonesia and the Philippines stood out. More specifically, in India different agriculture start-ups are developing tech-friendly solutions to agriculture development: internet of things and cloud computing technologies, for example, may help farmers improve crop management by streamlining monitoring processes through the use of smartphones and tablets. Cloud computing, together with artificial intelligence, also appears in China’s National Food and Strategic Reserves Administration’s plans to ensure local food security over the next five years by reducing food losses and waste, and by optimizing the country’s ability to react to emergency situations.

     Internet of things technologies were also used by a university in Australia to improve the efficiency of food supply chains, and applied by an Australian food company to automatically track the quality of milk produced in 100 dairy farms, without a human-to-human or human-to-computer interaction. Finally, on a different note, an egg processing facility in the Philippines signed a memorandum of agreement with an organic fertilizer producer towards the beginning of September in order to improve the conversion of animal manure and other farm wastes into fertilizer: this initiative will also be beneficial for pollution control, animal disease minimization and  soil condition improvement.

Policy and financial support in Europe and North America

13 newspaper articles during the month mentioned policy and financial support initiatives implemented by the institutions and bodies of the European Union, and by the central and local governments in the United States and in Canada. In early September, the EU 27 ministers of agriculture gathered during an informal meeting in Germany to discuss a proposal for a harmonised food labelling scheme, and most of them showed a common interest in making the indication of origin on front-of-pack food labels compulsory. Furthermore, the European Commission unveiled a new ambitious emissions-cut plan which provides for a new climate target for 2030 (whereby the EU 27 undertake to cut greenhouse emissions by at least 55%), stimulates the creation of green jobs and encourages all international partners to renew their commitments to limit the rise in global temperature to 1.5°C.

     The United States, on the other hand, has kept allocating parts of the Coronavirus Aid, Relief and Economic Security Act for a range of agricultural programs to offset the impact of both the coronavirus pandemic, of a derecho storm that passed through Iowa in August and of hurricane Sally, which devastated crops in Alabama in September. Canada’s ministry of agriculture, on the other hand, announced 32 new projects under the Emergency Processing Fund at the beginning of the month, whereby agri-food companies and meat processing facilities managed to enable social distancing and purchase reusable personal protective equipment.

Andrea Frusone

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