The coronavirus pandemic has increased the fears of an increasing food crisis in Sub-Saharan Africa, and more in particular in Mozambique, where the pandemic-induced movement restrictions are damaging farmers and traders, who find difficulties in transporting their food products to the markets. In Europe, on the other hand, most fruit processing companies are facing increased production costs due to the implementation of the new hygiene protocols, and the Scottish red meat processing and livestock farming sectors may be severely impacted by Brexit, since they rely on the European customer base for exports.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
Trading within Mozambique became even more difficult with the restrictions to movement imposed by the government to limit the consequences of the coronavirus pandemic. Last week, the country emerged from a second set of Covid-19 restrictions, which lasted 30 days: such measures are heavily affecting farmers and traders, because shipments of food products are taking much longer to reach the markets, and when the produce cannot be transported, entire boxes of fresh vegetables are dumped on the roadside. These breakdowns in the food supply chain are contributing to fears of a spiralling food crisis in Mozambique.
According to the European Association of Fruit and Vegetable Processing Industries (which represents around 500 companies in 11 European countries), the fruit and vegetable processing sector in the region has shown resilience since the start of the coronavirus pandemic, but the strict enforcement of the new hygiene protocols continues to result in increased production costs for all products in the sector portfolio. However, such increased costs are not reflected in the products’ permanently low prices (processed fruit products have not been valued for many year), resulting in heavy losses for the fruit processors.
The Scottish Association of Meat Wholesalers this week warned that the red meat sector could be affected by Brexit, which may cause long-lasting damage to the livestock supply chain throughout the United Kingdom (ad especially in Scotland, where livestock farming is very important). This is because trade with the European customers is worth around GBP 85 million in Scotland, giving jobs to around 4000 people in the Scottish red meat processing and livestock farming sector.
IMPACT ON COMMODITIES AND FOOD PRICES
Inflation pressures are building up both in the United States and in Nigeria: this is supported by the Department of Labour’s figures showing US import and export prices increasing in August (with repercussions on consumer and producer prices), while Nigeria’s inflation was driven for the seventh consecutive month by border closures, banditry, supply chain disruptions and higher food prices (including poultry, fish, vegetables and fruits). Inflation is projected to continue increasing in Nigeria, as the prices of the domestically produced food products will keep raising due to the impact of flash floods in the food growing regions of the country.
Nigeria’s inflation rate has increased for the seventh consecutive month to 13.22% in August, thus recording a 0.40% increase year-on-year: similarly, food inflation rose to 16%, due to a rise in the prices of bread and grains, potatoes, meat, fish, fruits, oils and vegetables (while a ban on maize imports may have increased the cost of poultry production). According to the analysists, the food inflation rate could further worsen in September, due to the recent decision by the Central Bank of Nigeria to halt sales of foreign exchange to food importers, and to raise electricity tariffs and fuel prices.
According to the US Department of Labour, import prices increased more than expected in August, causing further increases in both consumer and producer prices: for example, imported food prices rebounded by 0.4% last month, after dropping by 0.9% in July. However, the cost of goods imported from China was unchanged in August, after increasing by 0.2% in the previous month, while export prices also slightly increased in August as the rising prices for non-agricultural products offset the declining prices for agricultural goods.
Three recent measures taken by governments in Sub-Saharan Africa to enhance waste management and improve the agricultural workers’ livelihoods: in South Africa, the national waste management strategy was updated in order to make it more focused on the principles of the circular economy; in Ghana, the country’s Food and Drugs Authority will provide a better market access to many palm oil artisanal producers by the end of the current year; in Zimbabwe, a development program implemented by the US Agency for International Development increased the incomes of 13,000 beef and dairy farmers, thanks to an improved women’s participation in livestock activities and an efficient technical assistance.
South Africa’s Department of Environment, Forestry and Fisheries updated the country’s National Waste Management Strategy, which was recently approved by the government. This strategy is based on the principle of the circular economy, and it conceives waste management as a viable economic activity. However, there is still a lack of awareness in South Africa, where sorting at source is not very common: food waste makes up about one third of the total organic waste, and this makes the sorters’ job difficult and it renders other waste such as carboard unusable.
An international civil society organization has recently partnered with Ghana’s Food and Drugs Authority to promote high quality food safety standards among the artisanal palm oil producers in the country. The objective of this partnership is to improve market access to the workers in the palm oil value chain, because it will ensure that the finished products will be able to meet both the local and the international market standards. Under this partnership, 260 Ghanaian artisanal mill owners and 3000 processors will be trained by the end of 2020.
The US Agency for International Development partnered with an American consulting company that develops agricultural solutions to end hunger and poverty in order to implement the Feed the Future Livestock Development program in Zimbabwe, which has recently marked its completion. Since 2015, the program assisted more than 13,000 smallholder farmers in the country by creating economic opportunities that increased their incomes on average by 353%. More in particular, the program’s training and technical assistance in good agriculture practices gave beef and dairy farmers the opportunity to sustainably increase their productivity.
In southern Africa, food insecurity levels are still high, and they are also projected to increase significantly (despite good maize harvests in Malawi, Mozambique and South Africa) as the coronavirus pandemic progressively impacts the urban poor, and several sources of income for many families in the region have drastically diminished. In Europe, on the other hand, a major source of tension between the European Union and the United Kingdom within the context of the Brexit negotiations could be resolved, as the UK has recently claimed it will provide details of its post-Brexit animal and plant health rules to the UE by the end of next month.
The stalemate on food exports between the European Union and the United Kingdom may be on course to being solved, thanks to a real potential for progress on the UK’s post-Brexit animal and plant health rules (or sanitary and phytosanitary measures), which the country has pledged to disclose in detail to the EU by the end of next month. These SPS measures are a detailed set of rules that third-party countries must meet if they want to export food into the EU: the European negotiation team wants more information on how the UK intends to implement them, so that it knows the conditions under which its farmers will be able to export goods to the UK from January.
Food insecurity levels remain high in Malawi, Mozambique and South Africa, but the favourable maize harvests in these countries are bringing some relief. However, several regional markets are under pressures as prices are increasing and key sources of income for families, communities and governments have substantially diminished. Furthermore, the remittances from breadwinners in South Africa, which are vital for millions in Zimbabwe, Malawi, Mozambique and Lesotho have drastically fallen, and the depreciation of the local currencies against the US dollar has further eroded the purchasing power.