Food and Agriculture Organization of the United Nations
    FAO Data Lab

    Selected weekly news on food chain disruptions and countries responses to the COVID-19 impact on food chains (22/03/2021 to 28/03/2021)

    4 December 2019, Al Hamraa, Hama Governorate, Syria - Syrian farmers take care of the wheat seeds received.
    ©FAO/Sheam Kaheel


    On top of the long-term consequences of the coronavirus pandemic, the United Kingdom’s food exports a currently bearing the brunt of the disruption of the trade ties between the country and the European Union and the additional paperwork that were caused by Brexit. More specifically, the export of food products like cheese, meat, chocolate and whisky took a big hit. Other countries, such as Brazil and the Philippines, have been affected by the issues caused by the pandemic on the global shipping industry: Brazil’s largest port is currently congested, as sugar and soybean traders from all over the world are rushing to secure loading slots, while the Philippines are struggling with the rising shipping costs and the lack of containers. In fact, there is an imbalance in the ownership of containers between developed countries and countries that are not major shipping points, such as the Philippines. One of the repercussions of this is that the value of the country’s banana exports has drastically decreased in January, while the risk of food shortages has increased.

    Brexit affects UK’s meat, cheese, chocolate and whisky exports to the EU

    According to the British Meat Processors Association, Brexit will cost the United Kingdom’s meat sector between GBP 90 and GBP 120 million a year in extra paperwork and certification costs, while exports to the European Union have already decreased by 50% year-on-year in January to February 2021 and up to three days have been added to export times. The combination of increased red tape and decreased exports is likely to cause a loss of trade of between 20% and 50% for the British meat companies. The consequences of Brexit on trade between the UK and the EU have also affected the exports of cheese, chocolate and whisky, which fell respectively by GBP 38 million, GBP 28 million and GBP 66 million.

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    Congestion at Latin America’s largest port is delaying soybean and sugar shipments

    The Port of Santos in Brazil (Latin America’s largest port) is currently congested, while consumers from all over the world are turning to Brazil for the import of sugar and soybean supplies. For this reason, sugar and soybean traders are rushing to secure loading slots in the port as the slowest Brazilian soybean harvest in 10 years is pushing the grains export window closer and closer to the sugar season. Meanwhile, the excess of shipments waiting to leave the Port of Santos is increasing transport costs and will probably cause delay arrivals at destinations. Sugar prices have already hit a four-year high last month, due to the tightness of supplies, while soybean prices are near seven-year highs.

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    Global supply issues are affecting Philippines’ food supply and export performance

    The rising shipping costs and the lack of vessels worldwide (which are both complications of the coronavirus pandemic) are likely to increase the risk of food shortages and anaemic export performance in the Philippines in the coming months. These issues in the global shipping industry started last year, when national lockdowns forced vessels and containers to be docked in major ports; when global trade partially recovered, the industry was overwhelmed with orders from developed countries that resulted in a container imbalance with countries that are not major shipping points, such as the Philippines. One of the consequences of this is that the value of banana exports from the Philippines bell by 47% year-on-year in January 2021.

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    Russian wheat export prices have decreased for the third consecutive week, due to a weaker demand and lower prices in Chicago and Paris (two important benchmarks for the wheat market), while high temperatures and good precipitation levels in the main production regions in Russia represent encouraging factors for the country’s 2021 wheat harvest. Similarly, both Australia and Mexico expect a good grains harvest during the year, thanks to favourable weather conditions and to government incentive programs. Meanwhile, the conflict in Yemen and all its consequences (currency depreciation, bans on food imports, attacks to food production and distribution sites) is affecting food prices, and therefore the overall food security of the country. Nepal, on the other hand, is currently struggling with rising broiler prices, caused by the difficulties in sourcing sufficient supplies of parent hens and roosters from foreign suppliers.

    Wheat export prices and production overview

    For the third consecutive week, Russian wheat export prices have decreased amid a weaker demand and due to the lower prices in Chicago and Paris (prompted by the good weather conditions in the Northern Hemisphere, which have boosted expectations for bumper supplies). The weather has improved for the Black Sea crops as well, with rains in Russia’s southern regions and higher temperatures. In Australia, the recent floods will benefit wheat farmers thanks to an improved soil moisture for crop planting that promises another good bumper this year. Finally, Mexico’s grain production is expected to increase as well, thanks to government incentive programs.

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    Conflict in Yemen has caused huge stable food price increases over the last four years

    According to a new research conducted by the International Rescue Committee, over the last four years in Yemen there have been huge increases in food prices as an indirect consequence of the conflict that has escalated six years ago in the country. This has repercussions on malnutrition levels in Yemen, which for children under 5 years old is at the highest ever recorded, and on food security (over half of all the people in the country is currently going hungry). More in particular, the key household staples that saw their prices increase from February 2016 to October 2020 are wheat flour (133% price rise), vegetable oil (96%) and rice (164%). The main factors that contributed to such increases include the economic warfare (e.g. bans on food imports), currency depreciation, and the attacks to food production, storage and distribution sites.


    COVID travel restrictions are causing a drop in broiler production in Nepal

    According to the Nepali poultry traders, the retail price of chicken has recently increased in the Kathmandu Valley due to the COVID-induced travel restrictions that stalled the imports of parent stock and to a growing demand for chicken. In fact, normally the hatcheries in Nepal purchase hens and roosters from foreign suppliers (Malaysia, Thailand, the United Kingdom and the United States), and then produce fertilised eggs that hatch into broiler chicks. International flights to Nepal were suspended for nearly seven months, so that regular orders of parent hens and roosters came to a stop. Even though the flights have now resumed, the import of parent stock is still not regular, and this is causing a drop in broiler production, and the consequent price increase amid a high demand.



    Thanks to the interest of foreign companies, the United Arab Emirates and Sierra Leone will respectively support their food security and market access enhancement agendas: the UAE’s Abu Dhabi Development Holding Company has recently reached an agreement with a global merchant firm that includes a long-term supply deal to sell agricultural commodities to the country, while a large fruit processing company in Sierra Leone will have access to a debt facility provided by two impact investment funds in the Netherlands, that will be used to expand its fruit processing capacity and to provide a better market access to 10,000 fruit farmers in the country. Two private companies in the United States and in Sweden, on the other hand, are currently focusing efforts on the creation of digital e-commerce platforms that will allow companies to sell their surplus food online and to manage their excess and slow-moving inventory more efficiently.

    New deal aims at supporting UAE’s objective to achieve food security

    According to the United Arab Emirates’ food and water security minister, the new deal that was recently reached between the Louis Dreyfus Company (a global merchant firm that is involved in agriculture and food processing) and the Abu Dhabi Development Holding Company is an important part of the country’s food security strategy. In fact, the deal includes a long-term supply agreement to sell agricultural commodities to the United Arab Emirates, which is a country that imports large quantities of food. Another important part of the UAE’s strategy to achieve food security is boosting locally grown crops (although self-sufficiency has so far only been achieved for dates and cucumbers) and expanding the country’s food processing sector in order to increase the use of the strategic grain silos that were built at the Port of Fujairah.

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    Private companies in Sweden and US use digital platforms to mitigate food waste

    This week’s media coverage highlights two private initiatives in Sweden and in the United States to tackle food losses and waste. A subsidiary of an important Swedish investment group is currently investing in the food waste reducing e-commerce platform Matsmart-Motatos, which transforms food waste into new revenue streams at a meaningful scale by reselling surplus food online. In the United States, on the other hand, a Boston-based software company is offering a B2B sales platform that allows food and beverage companies to manage their excess and slow-moving inventory across a network of discount retailers and non-profit institutions. For example, the companies can communicate sales opportunities, collect offers and allocate inventory with more shelf life through the B2B platform.

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    New debt facility will indirectly benefit 10,000 fruit farmers in Sierra Leone

    Two Netherlands-based impact investment funds have recently teamed up to finance the expansion of a Sierra Leonean company’s fruit processing capacity, in order to provide many fruit farmers in Sierra Leone with an improved market access for their agricultural products. More in particular, this loan financing allowed the fruit processing company to install a 3-tonnes-per-hour fruit processing plant that created an immediate relief to the company’s input supply chain and to around 10,000 fruit farmers in the country, during the peak of the COVID-19 outbreak. Furthermore, the loan will support the company’s working capital needs during a very difficult time for global supply chains and logistics.



    This week’s media coverage highlights three difficulties that are characteristic to different regional food supply chains. In Africa, the main issue is represented by the continent’s tendency to outsource much of its industrial capacity and to dedicate less efforts to the establishment of self-sufficiency in terms of food production; however, the promotion of regional value chains through the African Continental Free Trade Area could be a way to accelerate industrialization, remove tariffs on goods and reduce Africa’s food import bill. In Latin America and the Caribbean, on the other hand, women farmers are more food insecure than men and more prone to suffer from the impacts of climate change due to pre-existing inequalities. In Europe, finally, farmers struggle due to the low food prices, so that setting a minimum price (higher than the cost of production) could represent a temporary solution.

    AFRICA – Africa’s food import bill estimated to rise to USD 110 billion by 2025

    During the Conference of African Ministers of Finance and Development that was organized during the week by the United Nations Economic Commission for Africa in Addis Ababa it was noted by the Minister-Designate for Finance of Ghana that the continent’s food import bill of USD 35 billion is estimated to increase to USD 110 billion by 2025, and that Africa has lost its capacity to produce its own food. The coronavirus pandemic has highlighted the need for African countries to build internal resilience, and a good opportunity to achieve this objective is represented by the African Continental Free Trade Area, which brings together 55 African countries, and thus would promote regional value chains and lower border trading fees.


    AMERICAS – Latin American women and more affected by climate change than men

    Women (and especially women farmers) in Latin America are more affected by climate change than men due to various socio-economic factors. In fact, women are normally responsible for tasks that involve the procurement of food, water and resources for energy generation, so that given their scarcity due to climate change, they can’t devote more time to education. This contributes to already existing inequalities: according to the United Nations Economic Commission for Latin America and the Caribbean, for example, the largest share of people living in situations of poverty in the region is composed of women. Furthermore, 8.4% of all women in Latin America is living in a situation of severe food insecurity (compared to 6.9% of all men).


    EUROPE – European farmers have been left behind over the years

    Over the past century, families in Europe have gradually become able to survive comfortably with food costs under 10% of their weekly budget, to the detriment of farmers, who have been left behind: in fact, in a free-market economy, it is difficult to protect farmers without causing unintended consequences elsewhere along the food supply chain. However, the French government has recently established that food will not be sold below the cost of production, but it will take at least a year before the effectiveness of this rule can be properly measured. In fact, some of the French supermarkets do not intend to increase food prices for their consumers, so this law could have little impact.