Worldwide agricultural production output overview

Nearly half of the mentions to food chain disruptions in developed and developing countries around the world during the month of November (39 mentions out of a total of 84 mentions to food chain disruptions) made reference to agricultural producers struggling to maintain average or above-average production outputs: this situation was widely observed across countries, but it especially applied to Latin America, to Europe, and to South and Southeast Asia.

     More in particular, Bolivia was mainly affected by the smuggling of agricultural products, such as beef, rice, maize, chicken, pork and vegetables, and by unfavourable weather conditions (triggered by climate change), as a prolonged drought (and the fires that ravaged hectares of land throughout the country) curtailed the production of bananas by almost 50%. Brazil’s agricultural production was also affected by drought, which reflected on soybean prices and brought China to enhance its soybean imports from the United States. Farmers in Honduras, on the other hand, were mainly affected by Hurricane Eta, which caused considerable damages to agriculture and to transportation infrastructure, while Venezuela is still struggling with gasoline shortages that hamper food distribution and force farmers to turn to the black market, where prices are much higher.

     In Europe, the Spanish, French, Italian, Romanian and Moldavian winemakers were equally affected by a combination of unfavourable weather conditions and by the impact of the coronavirus pandemic: drought hit wine production levels in Romania and Moldova, while many wine producers in France, Italy and Spain decided to fix vinified volumes below last year’s levels, because of the drop in demand on the global wine market, caused by the pandemic. Furthermore, sheep meat producers in France and in the United Kingdom recorded a decrease in production levels compared to the same period last year, while poultry producers in the Netherlands were affected by an outbreak of bird flu towards the end of October, which forced them to cull 35,000 broiler chickens.

     Finally, the countries with the most affected agricultural producers in Asia were India and Malaysia: onion and rice production in India between the end of October and the beginning of November was affected by heavy and persistent rains, which also determined hikes in prices, while Malaysia struggled with a contraction of the global demand for palm oil and with the air travel restrictions (both caused by the impact of the coronavirus pandemic), which prevented migrant workers from working in the Malaysian plantations. In the Philippines, on the other hand, those who struggled the most were coconut farmers and pork producers.

Trade restrictions and shortages of containers affect exporters

The second most mentioned food chain disruption stage during the month was export, almost equally in relation to developed and developing countries (which respectively recorded 12 and 9 mentions in relation to exports). The most affected developed countries were Australia, the United States and Canada, while the most affected developing countries were Ecuador, Mexico and Ghana.

     More in particular, the prolonged period of drought in Australia contributed to the decrease in cattle and beef export volumes, and the country has also kept struggling amid the trade tensions with China, which started limiting wine imports from Australia towards the beginning of November, causing wine exporters to keep stockpiles of wine mounting in warehouses. Both the US and the Canadian exporters, on the other hand, were affected by a shortage of containers during the month, caused by an unprecedented demand for higher-value North American consumer imports by containers from Asia. This situation especially affected US soybean exporters, and Canadian pulses shippers.

     Like Australia, Ecuadorian seafood exporters were also affected by China’s import restrictions (in this case prompted by the alleged findings of coronavirus traces on imported frozen seafood), while Mexico (which became the largest strawberry exporter in the world last year) suffered from Florida’s and California’s attempts to limit strawberry imports from the country, which claimed that Mexican strawberry growers have access to government subsidies. Finally, according to a British non-profit organization, the end of the Brexit transition period between the United Kingdom and the European Union may also damage non-European countries, such as Ghana. In fact, the supply of bananas from Ghana to the UK could be interrupted, due to the fact that the Ghanaian banana exporters will face a post-Brexit import duty of GBP 95 per ton of produce, which would make shipping the fruit to the UK unprofitable.

Most mentioned commodities in relation to developing countries

Grains were the most mentioned commodities in relation to developing countries during the month. More specifically, maize and wheat were mentioned 44 times (while only 7 times in relation to developed countries), especially in reference to Latin American, East Asian and Sub-Saharan African countries. For example, maize was often mentioned in news related to Nigeria and to several East African countries: in Nigeria, many farmers towards the beginning of November claimed that, due to the poor returns on their investments in agriculture, they had to abandon food crops (such as maize) and focus on cash crops (such as cassava and cashew) in order to generate more income, while a preliminary analysis on maize production during the 2020/21 marketing year in East Africa suggested that the regional maize market is expected to be robust and the prices to remain high due to the worsening economic conditions in some countries. For what concerns Latin America and East Asia, on the other hand, maize was mentioned in connection to Mexico, Argentina and China.

    Another frequently mentioned commodity in connection to developing countries during the month was rice, which recorded 21 mentions. Most of these mentions made reference to South and Southeast Asian countries, such as India, Bangladesh, the Philippines, Thailand and Vietnam. Since the end of last month, rice production and transportation were hampered in the whole region by heavy rains and landslides, which in some cases also caused exports to slow down. More in particular, Vietnam faced an imbalance between rice demand and offer, which resulted in a hike in export prices and forced the country to strengthen rice imports from the Philippines. Similarly, the excessive rainfall in Bangladesh determined a low production output (down 15% year-on-year), while a weaker rupee and the arrival of new season supplies in India during the first half of November had a stabilizing effect on rice export prices.

     Finally, fresh fruits and vegetables were also frequently mentioned with regard to developing countries, and especially China and India in Asia, and Mauritania and Morocco in Africa. The news mentioning fruit in China detailed the possible effects of typhoons on fruit production in the southern regions of the country towards the end of October, and the Guangdong region’s fruit export performance during 2020, while those related to India mentioned the disruptive effects of the heavy rains on the production of onions and other vegetables. For what concerns Morocco and Mauritania, on the other hand, the news mentioning trade in fruit and vegetables between the two countries made reference to a roadblock organized by the Polisario Front, which prevented Moroccan haulers from transporting these goods to the West African countries, including Mauritania.

Most mentioned commodities in relation to developed countries

The most mentioned commodities in relation to developed countries, on the other hand, were soybeans, wine and spirits, and beef. Soybeans were mainly mentioned in relation to the United States, in news that analyzed the country’s soybean export trends in relation to China’s growing import demand. For what concerns wine and spirits, on the other hand, the most mentioned countries were Australia and some of the EU member states (especially Spain): as mentioned in the first section of this monthly news digest, the Australian winemakers resented the import restrictions imposed by China, while the European ones were affected by a decrease in the global demand for wine.

     Finally, some of these European countries, in addition to the US and Australia, were also mentioned in relation to beef: more in particular, Australia, the United Kingdom, France and Italy were mentioned in relation to the decline in the total value of the Scottish and Australian beef exports, while for what concerns the US, beef was mentioned in reference to the measures taken by some of the local authorities to support the recovery of the beef sector from the disruptive effects of the coronavirus pandemic.

Financial support initiatives in developing and developed countries 

The most common kind of countries’ response to food chain disruptions during the month was financial support, both in developing countries (17 mentions) and in developed countries (8 mentions). More in particular, the countries that were mentioned the most in connection to financial support initiatives were Nigeria, Uganda (5 mentions cumulatively) and the United States (3 mentions).

     Nigeria and Uganda were both beneficiaries of the USD 2 billion that the International Finance Corporation earmarked to fight the coronavirus pandemic across developing countries and emerging markets by providing working capital, facilitating trade and supporting jobs. Furthermore, Nigeria was also one of the beneficiaries of the UN Central Emergency Response Fund, which provided around USD 15 million for the prevention of possible situations of famine, while the Lagos State Government launched an NGN 5 billion economic recovery support plan for small and medium-sized enterprises to help them recover from the effects of the coronavirus pandemic.

     For what concerns the United States, on the other hand, all of the mentions to financial support initiatives referred to additional Coronavirus Aid, Relief, and Economic Security (CARES) Act financing announced by different state authorities: both Iowa and Indiana will use it for to award meat processors with meat processing and expansion grants that will be used to purchase or upgrade personal protective equipment, while Hawaii committed the allocation of an additional USD 4 million to the support of the Kauai county’s beef industry.

Technological improvement intiatives in developing and developed countries

The second most mentioned measures taken by countries during the month fall under the category of technological improvements. More specifically, November’s media coverage offered 11 mentions to technological improvement initiatives in developing countries, and 7 mentions in developed countries. The United Kingdom was the developed country that recorded more mentions related to this kind of response: one of them consists in a new online tool developed by a public body that supports the Scottish red meat sector by helping livestock farmers maximise their profits, while the others referred to start-ups raising funds to develop innovative solutions related to ocean health and agriculture.

     China and India, on the other hand, were the developing countries that recorded more mentions related to technological improvement initiatives: more in particular, China implemented a new traceability system for imported frozen meat, fish and seafood in Beijing and applied the Internet of Things technology to cattle farming, which enables the tracking of livestock activities in order to link movements to specific behaviours, thus improving the early detection of diseases. India’s government, on the other hand, implemented 27 new initiatives for the improvement of the country’s cold chain infrastructure in order to reduce food losses and waste, while many start-ups in the country, with the same objective, connected farmers to big buyers through smartphone apps and used artificial intelligence to improve the national food supply chain.

Provision of equipment, material and training in Sub-Saharan Africa and Southeast Asia 

The third most mentioned kind of countries’ response was the provision of material, equipment or training, especially in the developing regions of the world. In six cases, the mentions to this type of measure referred to Sub-Saharan African countries, such as Ethiopia and Ghana: thanks to the support of the Lutheran World Federation, many Ethiopian farmers that were affected by the swarms of desert locusts earlier this year were provided with 15,000 improved seeds, feed for livestock and cash assistance, while an equipment leasing company distributed 85 combine harvesters to several beneficiaries in the country, including the Ethiopian Agricultural Business Corporation. In Ghana, on the other hand, the country’s government launched the Coffee Development Programme, which aims at improving Ghana’s coffee production output through the distribution of seedlings and through disease control. Other mentions to measures that provided for the supply of equipment and material made reference to Southeast Asian countries, such as the Philippines, where the country’s Department of Agriculture distributed PHP 88 million worth of farm machineries to around 64 farmer cooperatives and associations, and Indonesia, whose Chamber of Commerce and Industry partnered with a public-private cooperation platform to provide 1 million cocoa farmers with an improved access to agricultural inputs and training.

Andrea Frusone

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