Texas is likely to face a shortage of lettuce in the near future, due to the interruption in supply from Central California, that was mainly caused by the wildfires that hit the state this summer, the prolonged drought and a lettuce disease that has affected the production output. Pakistan, on the other hand, is still struggling with a sugar shortage that mainly affects millers, who have recently sent a letter to the Ministries of Industries and National Food Security, threatening to shut down in case they don’t get a regular supply of raw material. Finally, Canada is dealing with a shortage of containers that is affecting both exporters and pulses growers, who normally grow peas and lentils for the Asian market in this time of the year.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
According to the Agricultural and Mechanical College of Texas, lettuce losses from Central California, caused by the combination of a severe drought, the wildfires and a lettuce disease, could cause a shortage of this food product in some of Texas’ grocery stores and restaurants.
The Pakistan Sugar Mills Association has recently wrote a letter to the country’s Ministry of Industries and Production, and to the Ministry of National Food Security and Research, warning that the sugar mills throughout Pakistan may be forced to shut down as they are still facing severe shortages of raw material. In fact, sugar farmers have not started harvesting sugarcane in most regions of the country yet.
Many Canadian companies are rushing to ship the containers to Asia, so that consumer goods made in factories there can be shipped to North America in time for the busy Christmas shopping season. As a result, there is a shortage of containers at Vancouver’s port that is slowing down Canada’s exports of peas and lentils (which remain in storage on farms). This bottleneck is hitting the country’s farmers hard, just as pulse exports to Asia are normally higher, following a large Canadian harvest.
IMPACT ON COMMODITIES AND FOOD PRICES
The prices of potatoes and rice (among other commodities) keep increasing in Bangladesh, due to the shrinking supplies: the country’s state grains agency has recently issued an international tender to purchase 50,000 tons of rice in an attempt to curb the increase in domestic prices (which have gone up around 50% since March). Thailand is facing a similar issue because fresh rice supplies have not arrived yet. In the United States, on the other hand, the commodity that has recorded the highest price increase is soybean, due to the drought in key South American soybean producing countries, such as Brazil and Argentina.
Due to the shortage of potatoes that is still afflicting Bangladesh (and to the fact that potato stocks have neared an end due to the off-season), the prices for this commodity have increased in the country’s kitchen markets over the week. Furthermore, the prices of rice, onion, edible oil and red lentil remained high, while vegetable prices have slightly decreased.
The United States’ soybean futures have increased for a sixth consecutive session on Friday, reaching a four-year high due to the dry conditions in key producing areas in South America, and to the concerns about a decreasing soybean supply in the US. While some rain has reached the Brazilian and Argentine grain belts, more moisture is needed to complete soybean and corn planting, and to boost crop development.
Rice exports from Thailand have increased to their highest in nearly two months this week on concerns over supply, even though the demand remained flat. In fact, the new rice supplies have not arrived yet in Thailand, which resulted in higher prices, and the demand has been weak lately due to the fact that container freight rates are going up. Rice prices keep increasing in Bangladesh, too, which has issued an international tender to purchase 50,000 of this commodity to stabilize the prices.
Today’s media coverage highlights the efforts of three different countries towards the improvement of the linkages between businesses, agricultural off-takers and smallholder farmers. Ghana’s Ministry of Food and Agriculture has organized a market access linkage event with the hope that, even after the project ends, farmers will have more possibilities to get in contact with off-takers to sell their produce. In Myanmar, on the other hand, several NGOs and businesses are developing digital solutions to support employment in agriculture in the country’s rural areas, while the Indonesian Chamber of Commerce and Industry has partnered with a public-private cooperation platform to provide 1 million farmers with an improved access to financing, inputs and training.
As part of the Savannah Zone Agricultural Productivity Improvement Project (which is being implemented by Ghana’s Ministry of Food and Agriculture with funding from the African Development Bank), a market access linkage event has been recently organized between major value chain actors in the maize, soybean and rice sectors, including farmers, processors and agricultural input dealers. The objective of this event is to strengthen the relationship between farmers and off-takers, even after the project ends.
Recently, non-governmental organizations and companies in Myanmar have been addressing low education and low employment in agriculture in the country’s rural areas through digital innovation. For example, a non-governmental organization that uses technology to provide value-added services to farmers has developed an app that uses crop prediction models to send advisory alerts to more than 500,000 smallholder farmers (based on a farm’s location, planting cycle and crop variety), in order to help them adjust to local climate and weather changes.
The president of Indonesia has recently urged the country’s food sector businesses to partner with 2 million independent farmers by 2023 to improve their productivity, and therefore their food security and livelihoods. The country’s Chamber of Commerce and Industry has already partnered with a public-private cooperation platform that provided 1 million farmers (most of whom are cocoa growers) with an improved access to financing, agricultural inputs and training.
Australia and New Zealand haver reached an agreement that will improve market access for the Australian fruits and vegetables producers and ease export procedures for the exporters. In West Africa, on the other hand, Ghana and Ivory Coast have recently threatened the world’s largest chocolate producers to suspend their sustainability schemes if they keep hindering their efforts to fight poverty for cocoa farmers. Finally, a Belgian impact investor has launched a global fund to finance European food, agriculture and ocean start-ups to solve systemic challenges across the food system.
Australia and New Zealand have recently signed the new Australia-New Zealand Export Plan, which opens up horticultural market access opportunities for the Australian fruit and vegetable producers, and helps reduce costs and regulatory burdens for the Australian exporters. In fact, the new Plan recognises the existing Australian export certification system, thus removing all the specific requirements for exporting fruit and vegetables to New Zealand.
According to Ghana’s and Ivory Coast’s cocoa regulators, the world’s largest chocolate companies are hindering the two countries’ attempts to fight poverty for cocoa farmers. As a result, they have threatened to suspend the sustainability schemes that these companies use to charge consumers a premium for chocolate certified as sustainably sourced.
A Belgian impact investor has closed an EUR 274.5 million global fund to help revolutionise the food and agriculture sector. This fund will be used to finance Europe’s most ambitious food, agriculture and ocean tech start-ups, including a French company that focuses on insect farming, a German on-demand vertical farming company and a British company that seeks to eliminate plastics by creating a packaging material from seaweed.