The food storage capacity of the United States may face substantial challenges if people will continue to rely on home grocery delivery (whose success increased during the coronavirus lockdown), as the country’s cold storage facilities are not as developed as dry warehouses. The United Kingdom, on the other hand, fears the effects of a second coronavirus spike on its food exports, and the looming changes to the UK-EU post-transition trade rules. Finally, the huge explosions that wrecked Beirut’s port on Tuesday may bring repercussions on Lebanon’s food supply as they also tore through major grain silos and ruined around 250 tons of rice.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
Vacancy for cold storage was already near zero across the United States before the coronavirus pandemic, but this health crisis has placed and will continue to place significant stress on the supply chain of food that requires a controlled temperature environment. For example, it is well known that more people than ever have started to rely on home grocery delivery during the coronavirus lockdown: around one third of all Americans. If only a portion of these consumers will continue to choose home delivery in the future, the demand for cold storage facilities could rise abruptly, and both US regulations around food and food industries will have to adapt quickly.
The United Kingdom’s food and drink industry could face future challenges posed by the unclear UK-EU post-transition trade rules and by a possible second coronavirus spike in the country. More in particular, UK lamb exports to the EU could decline if an agreement is not reached for mutual recognition of road transport permits for hauliers (three quarters of UK delivery drivers do not have a European permit). Furthermore, salmon exports would be particularly vulnerable in case of a second spike, considering that China halted imports of the fish during the first lockdown.
On Tuesday evening, two explosions in the port of Lebanon’s capital city sent a blast wave across Beirut, killing at least 137 people and injuring around 5,000 more: the scale of the damage is huge, with buildings miles from the port lying in ruin and up to 300,000 people suffering damage to their homes. The blast happened next to a grain store in the port, which has a capacity of 120,000 tons and is now unusable. Furthermore, other food that was temporarily stored in the port was ruined: for example, a local commodity trader lost 10 containers of rice (around 250 tons).
IMPACT ON COMMODITIES AND FOOD PRICES
According to FAO, global food prices have increased over the month of July: the price rally was led by vegetable oils, dairy products and sugar, which outweighed lower prices in the meat markets, while the cereal price index maintained a stable value. In Australia, the prices of barley, sorghum and wheat softened thanks to the rainfall that is expected in the southern part of the country. Finally, plummeting banana prices in Uganda raised the discussion on the need to industrialize the banana sector in the country.
Prices for barley, sorghum and wheat have recently decreased in response to the 10-40 millimetres rainfall that is forecasted in Southern Australia and that will consolidate yield prospects in all states but Queensland. Victoria, where the state premier has recently introduced new lockdown measures as the number of Covid-19 cases keeps increasing, is the only state where growers have considerable grain stocks left on farm.
The FAO food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 94.2 points in July, against 93.1 points in June. The price rally was led by vegetable oils, dairy products and sugar. Palm oil prices increased in response to the expected slowdowns in production and a parallel rising global demand, while earlier in the year the demand for vegetable oil was curbed by lockdown measures and by a low biofuel demand. Milk powders rose due to a strong import demand by Asian buyers, while sugar prices increased due to the rising energy prices and reduced production in Thailand.
Over the last few weeks, banana prices have decreased in Uganda, highlighting the need for the country to industrialize its banana industry in order to be able to compete with other major banana producing countries. The first area of intervention should cover productivity, and focus on pest control, providing farmers with clean planting materials, promoting the use of fertilizers and soil moisture conservation techniques and enhancing farmers training in good agricultural practices.
A new green technology developed by the University of Johannesburg uses solar energy to dry food, thus helping South Africa to reduce the amounts of food wasted in the country (where around 20% of all families are food insecure). Food insecurity is also something that disproportionally affects indigenous people around the world. However, more than 30 organizations have the specific objective of protecting indigenous food systems through different initiatives, including financial support, technical assistance and training.
The University of Johannesburg’s Process, Energy and Environmental Technology Station has developed an eco-friendly technology that uses solar energy to dry food, reducing spoilage, alleviating rural poverty and contributing to the reduction of food loss and waste. In South Africa, the agricultural sector contributes 2.2% to the GDP, but nearly the same value is lost as food waste (while around 20% of all households suffer from food insecurity). This new food dehydration technology could be particularly useful in the meat sector and in the fruit and vegetable sector.
The world’s indigenous peoples face disproportionate rates of food insecurity, and while they only represent 5% of the total world population, they account for 15% of the world’s poor. However, there are around 30 organizations around the world whose main objective is to protect and cultivate indigenous food systems through seed saving initiatives, financial support, mentorship and community feeding programs. For example, the Asia Indigenous People Pact gathers different indigenous organizations across Southern and Eastern Asia to protect indigenous lands, food systems and biodiversity.
In Africa, most of the research institutions had to suspend or stop some of the activities that they conduct regularly, because of the restrictions imposed by the governments to limit the spread of the coronavirus. For example, the International Institute of Tropical Agriculture in Tanzania had planned to conduct training in aquaculture in the eastern part of the Democratic Republic of Congo, but the pandemic has stopped or delayed the delivery of the cages it needed, and of the imported fish feed. Meanwhile, the negotiations between Ethiopia, Egypt and Sudan related to the Grand Ethiopian Renaissance Dam still risk ending in a stalemate as Sudan has recently threatened to withdraw from the talks.
On Tuesday, Egypt called for a suspension of the negotiation talks with Ethiopia to solve the dispute over the Grand Ethiopian Renaissance Dam, and Sudan threatened to withdraw in case Ethiopia insisted on linking the prosecution of the talks to a renegotiation of the deal. Both Egypt and Sudan invoked a “historic right” over the Nile river, guaranteed by two treaties concluded in 1929 and 1959; however, Ethiopia uses a more recent treaty, signed in 2010 by six riverside countries and boycotted by Egypt and Sudan, which authorizes the implementation of irrigation projects and the construction of dams on the river.
During the coronavirus pandemic, most of the African agricultural research centres suspended their research activities, trainings and tours. For example, 70% of the 400 staff members working in the National Crops Resources Research Institute in Uganda have not reported for work since the country established a lockdown in March. Similarly, in Tanzania the lockdown was imposed by the government during the rainy season, causing researchers at the International Institute of Tropical Agriculture (which develops crops to improve yields) to miss critical data that would have been used for the institute’s experiments.