In the United States, the economic impact of the coronavirus pandemic has severely affected potato growers and processors in the state of Washington, and as a reaction to a plummeting demand for this agricultural product (due to the prolonged restaurant closures), farmers have reduced the potato acreage by 13% (which corresponds to around 729,120 tons of potatoes). In Europe, on the other hand, a first case of African Swine Fever (coming from Poland, where the disease arrived in 2014) was detected in Germany, while the southern region of Andalusia, in Spain, is suffering the effects of a drought that restricts water availability.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
According to the Washington State Potato Commission, the total economic losses from potato production and processing in 2020 in the state are expected to amount to roughly USD 1 billion dollars, because of the demand shocks determined by the coronavirus pandemic. In fact, Washington’s potato farmers and processors have been negatively affected by the prolonged restaurant shutdowns and the consequent fall in demand for their agricultural products, and potato acreage for the 2020 growing season was reduced by 13%.
In Germany (Europe’s largest pork producer), the first case of African Swine Fever has been recently detected in a wild boar found near the border with Poland (where the disease was first detected in 2014 and has spread throughout the country ever since), raising the likelihood of a widespread disruption in the market and a downward pressure on pork prices. The German Ministry of Agriculture has immediately launched several measures (which aim at thinning out the wild boar population) to avoid further contaminations.
A severe drought during the summer has forced a public company in Andalusia (southern Spain) to limit the availability of water during the night in the town of Santa Olalla del Cala, so that enough water is available for human consumption and for agriculture until the first rains come in the autumn. This decision was taken after the extra supply of water via tanker trucks turned out to be not sufficient in this region of Spain, where droughts are becoming more and more common.
IMPACT ON COMMODITIES AND FOOD PRICES
An overview of price increases for agricultural products around the world: in Nigeria, the pandemic-induced disruptions to the baking industry, a 5% tariff on wheat imports and an additional 15% levy are causing wheat and flour prices to increase, damaging both bakeries and consumers; in New Zealand, tomato growers planted less crops in April (when all restaurants and cafes were closed), which is now resulting in a supply shortage that is pushing tomato prices; an excessive rainfall, a cyclone and three consecutive floods have affected rice production in Bangladesh, which impacted on domestic prices.
The Breadmakers Association of Nigeria and the Association of Master Bakers and Caterers of Nigeria have both brought the potential impacts of the rising costs of flour, sugar, fuel and electricity (mainly due to the coronavirus pandemic and to duties on wheat) on the baking industry to the attention of the federal government. The price of flour has increased from NGN 10,500 to NGN 13,500 per 50kg bag in Nigeria, while sugar increased from NGN 13,500 per bag to as high as NGN 29,000 (and other baking ingredients experienced similar price increases).
Figures from New Zealand’s official data agency show that tomato prices rose 38% in August to an average price of NZD 13.65 a kilogram, which is an all-time high in the country. Such price increase was caused by the fact that 40% to 50% of tomatoes in New Zealand are sold to independent grocers, cafes and restaurants, which were closed in April due to the pandemic: this pushed growers to delay planting or to replant fewer tomato crops, resulting in a supply shortage that ultimately caused the hike in tomato prices.
Rice export prices rose in India as supplies remain constrained in the country due to the pandemic-induced disruptions, while Bangladesh may have to import the staple after natural calamities (excessive rainfall between March and April, a cyclone in May and consecutive floods between June and July) have damaged the crops and made domestic prices increase by 20% amid fears of a production shortfall. Finally, low domestic supplies pushed rice prices in Vietnam, too, but traders expect them to come down in the coming weeks.
In the United States, the Massachusetts Institute of Technology has recently designed an innovative food sensor that uses microscopic needles made from silk that pierce through plastic packaging to identify signs of spoilage or bacterial contamination in food. Meanwhile, the Panama Canal Authority has launched a call for bids on a USD 2 billion package of water supply projects to solve the shortage of water in the lakes that supply the canal’s locks (caused by the worst drought in many decades). Finally, the authorities of a cross-border region in southern Tanzania have implemented an initiative with a private company that aims at providing maize farmers in the area with additional equipment and training to boost production.
The engineers of the Massachusetts Institute of Technology have designed a food sensor made from an array of silk microneedles that pierces through the plastic packaging to sample food for signs of spoilage or bacterial contamination. Such sensor could be used at various stages along the food supply chain, including food processing. The microneedles are created from edible proteins that can be found in silk cocoons, and are designed to draw fluid into the back of the sensor.
The Panama Canal Authority has put out a call for bids on a USD 2 billion package of water supply projects aimed at combating a drought that affects the fresh water lakes that supply the canal’s locks, in order to find alternatives to the water currently supplied by two artificial lakes and to increase the supplies of freshwater to Panama City (which is home to about half the country’s population of 4 million). Water could be transferred from other lakes, or new dams and desalinization plants could be built to solve the issue.
The Malagano village is the Rukwa region’s grain basket (in southern Tanzania, on the border with Zambia and the Democratic Republic of the Congo), accounting for around 60% of the total maize produced. A private company and the Rukwa regional authorities are leading a joined initiative to further increase maize production in the area for local and export markets, by providing farmers with pre-delivery training and by supplying tractors and other agricultural inputs.
Several African countries (including Nigeria and Ghana) claimed that the coronavirus pandemic has further worsened the farmers’ access to credit, agricultural inputs, extension services and technologies due to the restrictions on movement, during the African Green Revolution Summit 2020, which was held last week. According to Greenpeace, many of those countries (such as South Africa and Morocco) imported tons of pesticides from European countries in 2018, which are extremely dangerous for the environment and for human and animal health. Meanwhile, many American and Canadian companies that deal with food and pharmaceutical trade are focusing on cold chain improvement to reduce food waste and the spoilage of medical supplies.
Last week, during the African Green Revolution Summit 2020, the Nigerian farmers claimed that the coronavirus pandemic further limited their access to inputs, technologies, labourers and traders, while the president of the Ghana Federation of Agricultural Producers said that the pandemic slowed down all agricultural activities in his country, where farmers experience similar difficulties in accessing inputs, markets, extension services and technologies as a result of the restrictions on movement.
For industries that deal with sensitive and perishable products such as food and pharmaceuticals, temperature-controlled supply chains (or cold chains) are critical to their operations: in North America, it is estimated that around 40% of food waste happens due to supply chain issues, while in pharmaceutical logistics, 30% of deliveries arrive to destination with some degree of damage or spoilage. In order to mitigate the impact of such issues, industry stakeholders are now turning to digitalization in order to improve cold chain monitoring.
According to new evidence gathered by Greenpeace, in 2018 several European companies sold more than 81,600 tons of pesticides that are prohibited in Europe (because they contaminate water and decimate pollinating insects, birds and fish) to 85 countries, three-quarters of which are developing countries. The United Kingdom is the top exporter of pesticides in the list (followed by Italy, Germany, the Netherlands, France, Spain and Belgium), while the main recipients were the United States, Brazil, Mexico, Colombia, Ecuador, South Africa, Morocco, India and Indonesia.