Today’s media coverage highlights two disruptions to the export stage of the American food value chain: the Canadian Food Inspection Agency decided to temporarily suspend romaine lettuce imports from California, due to the lack of post-harvest product testing (which is allegedly very difficult to implement on an industry-wide basis), while a 25% tariff imposed by the United States toward the end of last year on the imports of alcoholic beverages from the European Union caused a drastic decrease in the American whiskey exports (the US spirits industry’s largest export market) to the EU.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
The Canadian Food Inspection Agency (CFIA) has enforced new import restrictions (starting from October 7, until the end of the year) on all romaine lettuce produced in four counties in California, US, because of a lack of post-harvest product testing (which is due to limited laboratory capacity). California Leafy Greens Marketing Agreement’s CEO protested against such restriction, claiming that it does not provide a guarantee of food safety, and that the measures required by CFIA are difficult to implement on an industry-wide basis and in a short period of time.
According to the Distilled Spirits Council of the United States (Discus), the US whiskey exports to the European Union decreased by 41% from USD 757 million to USD 449 million between August 2019 and July 2020, due to a 25% tariff imposed by the United States on several alcoholic beverages from the United Kingdom, Germany, Ireland, Italy, Spain and France. Therefore, Discus and other trade associations have jointly asked the US Trade Representative to remove such tariff immediately.
IMPACT ON COMMODITIES AND FOOD PRICES
World vegetable oils and grains prices have increased for the fourth consecutive month, amid the unfavourable weather conditions that are inspiring negative wheat planting prospects in two of the world’s largest wheat exporters, the United States and Ukraine. The production forecasts are better in Russia (the first wheat exporter in the world), but the rising domestic prices and a weaker rouble could bring the country’s government to impose new wheat export restrictions. Worldwide average sugar and meat prices, on the other hand, have decreased month-on-month, while a cooler weather in South Africa is limiting potato, sweet potato, tomato, banana and onion production in the country.
The Food and Agriculture Organization’s food price index recorded an increase in world food prices for the fourth consecutive month in September, driven by strong increases for grains and vegetable oils. The average sugar prices, on the other hand, decreased by 2.6% from August, reflecting the expectations of a global production surplus for the new 2020/2021 season. Finally, the meat index dipped 0.9% from August, after China’s move to ban pork imports from Germany, due to the detection of the African swine fever in the country.
The start of the summer rainfall season and the related cool weather in South Africa have already had an impact on potato and sweet potato volumes on the wholesale markets, which have been lower and therefore characterised by higher prices. Tomato, banana and onion volumes are also very low on the market, while mango orchards in the country seem to be carrying a record crop.
A generalized lack of rainfall has raised concerns among traders about the prospects for wheat planting in the United States and in Ukraine, and for soybean planting in Brazil. On the other hand, Russia is expected to harvest a large crop this year, but the rising domestic prices and a weak rouble may bring the grain export quota mechanism back (the same one it implemented amid the coronavirus pandemic, whereby the Russian government imposed a quota of 7 million tons to limit exports of specific grains).
Three initiatives to improve productivity and safety within the agriculture and food sectors in Pakistan, Ghana and the US: the Khyber Pakhtunkhwa’s local government has recently approved the supply of cheap electricity to the industrial and agricultural workers in the province in order to promote the development of these two industries; Ghana’s government is disseminating a new set of food safety and quality standards throughout the country’s metropolitan, municipal and district authorities; the agricultural workers in Florida (most of whom are Spanish and Haitian) will receive COVID-19 control training, equipment and translated instructions.
The provincial government of Khyber Pakhtunkhwa (KP), in Pakistan, has recently established the modalities through which three recently built power stations will provide electricity at affordable prices to the local industrial and agricultural sectors for their development. This is part of a broader plan of the KP government to ensure prosperity, mitigate poverty, enhance employment opportunities and increase productivity by establishing special economic zones in the province.
Ghana’s Ministry of Local Government and Rural Development (in collaboration with the Ministry of Food and Agriculture’s Women in Agriculture Directorate) has recently established a set of food safety guidelines to be implemented by all metropolitan, municipal and district assemblies throughout the country to ensure the highest safety and quality standards for the food consumed in Ghana.
The University of Florida is partnering with the Florida Department of Agriculture and Consumer Services, and with county health agencies and farmworker coalitions throughout the state, in order to provide agricultural workers with COVID-19 free testing, safety information and training. More in particular, they will be supplied with face masks, training on social distancing and surfaces sanitizing, and posters containing safety instructions that are translated into Spanish and Haitian Creole.
A second investigation on the disruptive effects of the coronavirus pandemic on the activities of 32 ports in South and Central America has found out that most of them have identified COVID-19 cases among their workers, and more than a half experienced reduce shipments during the summer. In Australia, on the other hand, the Australian Export Grains Innovation Centre is probing for new potential market opportunities for Western Australian oat and wheat products in Southeast Asia and China, where the demand for these items is increasing.
A second survey on the effects of the coronavirus pandemic on the Latin American ports’ activities was carried out between July 23 and August 15 in in 32 ports scattered across Belize, Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama and the Dominican Republic. Almost 70% of the ports recorded COVID-19 cases among the workers, and nearly 60% of them experienced a decrease in the volume of shipments (one of them recorded a 50% decrease).
The Australian Minister of Food and Agriculture has recently announced the investment of AUD 2 million into market research and product innovation projects to support Western Australia’s grain industry’s pursuit of new market opportunities for wheat and oat products in Southeast Asia and China. In fact, market intelligence in Australia is pointing to a rising demand of these products from Asia, and Western Australia can take advantage of its convenient geographical proximity and good reputation as a reliable grains supplier.