Prospects of increased food insecurity in South Asia: the effects of the heavy flooding that hit Southern China last month have not been contained and their entity has been recently unveiled by the country’s Ministry of Emergency Management (55 million people affected, damage costs amounting to around USD 21 billion); in Nepal, the restrictions to movement imposed by the government to limit the spread of the coronavirus pandemic have caused many people to lose their jobs and reduced the amount of remittances sent back home, resulting in an increased number of children suffering from malnutrition.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
In March, the US Congress authorized the creation of a contingency fund (the Coronavirus Food Assistance Program) to support all the farmers that were suffering from the consequences of the coronavirus pandemic. However, it appears that the fund privileged large, industrialized farms over the smaller ones, so that many farmers are still asking for assistance: more in particular, the top 1% of the fund’s recipients received more than 20% of the whole funding (around USD 1.2 billion) and the top 10% got around 60%, while the bottom 10% were entitled to only 0.26% of the money that were available under the program.
The heavy flooding that engulfed Southern China affected large portions of the rice fields, causing the grain to ripe in advance, so that large swathes of the region are now deprived of rice. This had serious repercussions on the entire country’s supply of rice, as the Yangtze River basin (located in the affected area) accounts for 70% of China’s rice production. The Ministry of Emergency Management estimated that the cost of the disaster (which affected around 55 million people) amounts to USD 21 billion in destroyed farmlands, roads and other properties. Furthermore, the floods could cause China to lose 11.2 million tons worth of food compared to last year.
As a consequence of the restrictions imposed to limit the spread of the coronavirus pandemic, many households in Nepal reported job losses (widening the already existing income disparities within the country) and reduced remittances from abroad, which resulted in one third of all the families polled by UNICEF Nepal facing shortages of food and medicines. Such families are now unable to afford meat, eggs, dairy products and some vegetables, and this ultimately has an impact on children under five, 43% of whom were already malnourished before the pandemic. The situation appears even worse considering that many of the most vulnerable children who were getting school meals have not gone to school for the last five months.
IMPACT ON COMMODITIES AND FOOD PRICES
In the Indian subcontinent, the state of West Bengal in India is facing increased vegetable prices (between +30% and 40%) caused by high transport costs and a low demand (both determined, in turn, by the coronavirus lockdown measures), while Bangladesh managed to ensure a high rice production volume during the first half of 2020 but recently failed to procure enough grain from public granaries to replenish the food stocks. The authorities are now wondering whether to import rice during the next harvesting season, affecting Bangladesh’s precious foreign currency reserves, or to increase the offered rate when purchasing grain from rice millers.
Following the recent enforcement of the biweekly coronavirus lockdown in West Bengal, India, vegetable prices have increased steeply, due to the low demand and high transport costs that the lockdown entails. Furthermore, vegetables usually perish faster during the rainy season, and this makes another factor for such price increases. People that are still struggling to find work during the lockdowns often cannot afford vegetables, and vendors report high reductions in sales (resulting in the fact that many people stopped selling vegetables in West Bengal’s local markets). One of the commodities whose price rose is potatoes, which are largely consumed in the state.
Favourable growing conditions for maize and soy in the United States have kept stockpiles full and balanced the rising export demand for the upcoming marketing year (half of which comes from China, which will increase its imports following its food security concerns). In fact, the analysts expect the US maize yield to amount to around 180.5 bushels per acre and the soy yield to 51.2 bushels per acre, while China purchased at least 774,000 tons of US soybeans last week, to be delivered during the 2020-21 marketing year (which begins on September 1st).
Bangladesh’s Food Ministry is considering importing rice due to the Food Directorate’s failure to procure enough of the commodity from farmers to replenish a fast depleting food stock. In fact, the four-month procurement season will finish at the end of August and the analysts fear that the Food Directorate will not be able to meet even half of the procurement target. The country’s minister of agriculture stated that importing rice should be considered as a last resort (the high import duties would heavily affect Bangladesh’s foreign currency reserves), and suggested increasing the offer rate for public granaries, so that the government can procure its targeted rice volume internally and keep the food reserves full.
In Southern Africa, a rural development initiative implemented by the European Union will improve Zimbabwe’s meat and fish production while also providing technical assistance, training and knowledge dissemination through two different agricultural excellence centres near the capital city. In India, on the other hand, the prime minister has recently unveiled the establishment of a new Agriculture Infrastructure Fund, which may improve the country’s post-harvest management capacity by investing in the construction of innovative storage and processing facilities. Finally, Turkey has recently pledged to support Beirut’s citizens damaged by last week’s explosion by making its healthcare facilities and wheat supplies available.
India’s prime minister has recently launched a INR 1 trillion (around USD 13.4 billion) Agriculture Infrastructure Fund that will be used to set up storage and processing facilities (post-harvest agriculture infrastructures), thus helping farmers get greater value for their produce. In fact, farmer producer organizations and agri-entrepreneurs will be able to store and sell at higher prices by reducing wastes and by increasing processing and value addition. Ultimately, the fund will improve India’s ability to compete on the global stage, by creating opportunities to invest in innovate post-harvest management solutions (such as cold chain and warehousing).
Turkey’s vice president has recently stated that the country is ready to provide Lebanon with more medical and food assistance in the aftermath of the explosion that destructed Beirut’s port. More in particular, during a visit in the Lebanese capital he said that all of Turkey’s hospitals and air ambulances would remain at Lebanon’s service, and that the country can use the port of Mersin (on the Mediterranean coast) until Beirut’s port is rebuilt. Furthermore, the Turkish Cooperation and Coordination Agency has immediately provided 400 tons of wheat to the Port of Tripoli to reduce the food security concerns in Lebanon.
The EU-funded Zimbabwe Agriculture Knowledge and Innovation Services Program (worth around EUR 40 million), which was launched in June 2019, has a budget of EUR 1.3 million in 2020 alone, and is currently seeking to boost the fish, beef, dairy, pork, goat and poultry production in the country. Furthermore, the initiative intends to reach 60% of Zimbabwe’s rural population with innovative agricultural education, research and consulting. For this reason, two centres of agricultural excellence have been identified near Harare to serve as focal points for knowledge dissemination through demonstrations, workshops, field days and farmer training.
In Asia, beef production is forecasted to improve in China thanks to a strong internal demand that will offset the ongoing pork shortage in the country (mainly caused by the coronavirus pandemic and the African swine fever), while it will be slowed down by the lockdown restrictions in India, which limit the possibility to collect animals during home visits. In general, food exports continue to indicate a prominent expansion in the continent, and trade processes will be further streamlined thanks to a food import platform that was recently unveiled by Dubai Trade (a facilitation entity in the UAE), which will also support the reduction of food losses and waste.
The coronavirus pandemic keeps negatively affecting the Asian beef market, reducing production and hampering the international trade. However, since China was the first to partially recover from the effects of the lockdowns, more positive dynamics are expected during the second half of 2020, while India will face significant losses in production and exports. More in particular, the increase in China’s beef production will be driven by a strong internal demand for beef, which is going to balance the ongoing pork shortage, while beef production in India will be slowed down by coronavirus lockdowns, especially since the collection of animals is usually carried out in the form of home visits.
The first unified food import platform in the Middle East, which will facilitate the import and export of food shipments throughout Dubai ports, was recently unveiled by Dubai Trade, the premier trade facilitation entity in the United Arab Emirates. The platform is expected to assist over 18,000 companies in Dubai in executing 360,000 transactions annually, making the UAE one of the leading countries worldwide in the post-pandemic economic recovery. Furthermore, the platform will play a role in protecting the food supply chain from further disruptions by connecting food traders with food sources, thus limiting the spoilage of food crops.
Africa is one of the hotspots of vulnerability to the adverse effects of climate change, which cause political, socioeconomic and biophysical strains, thus ultimately impacting on the continent’s productivity. In fact, several African countries depend on climate-sensitive sectors (agriculture, fishery, forestry) and on their natural resources. The use of renewable biological resources has been identified as a solution to such geopolitical challenges, but bioeconomy has not been adopted by many African countries, even though they are endowed with abundant natural biomass, because of their poor state of investment in research and development.