Today’s media coverage highlights three food chain disruptions occurred in Turkey, the United Kingdom and the United States in recent months and at different stages: Turkey’s grains and legumes exports to France have decreased during the first 8 months of 2020, but the country remains one of the largest exporters of wheat products; many hospitality workers have recently protested in London’s Parliament Square against the new restrictions imposed by the government to limit the increase in Covid-19 cases; despite having one of the safest water systems, the United States still struggles with many waterborne diseases, such as legionellosis.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
According to the Turkish Trade Ministry, the value of grains and legumes exports from Turkey to France has decreased during the last 8 months, compared to the same period one year ago. However, Turkey remains the world’s largest flour, semolina and cracked wheat exporter and the second-largest pasta exporter. In fact, while exports to France decreased during the reporting period, in August 2020 Turkey exported grains and legumes to international markets in the amount of over USD 545 million (13.4% more compared to August 2019).
Around 200 British hospitality workers have recently demonstrated in London against the new pandemic-related restrictions imposed by the UK government, which include the obligation for pubs and restaurants to ensure customers consume food and drink only while seated, and to close between 10pm and 5am. According to the demonstrators, these new restrictions were put in place without consulting the industry’s representatives.
The United States has one of the world’s safest drinking water supplies; however, many microorganisms still cause waterborne diseases to an estimated 4 to 32 million people every year. During the coronavirus pandemic, the attention focused again on Legionella, because the shutdowns that characterised the coronavirus lockdown may have left warm water stagnant in pipes, thus offering a perfect environment for this type of bacteria to multiply.
IMPACT ON COMMODITIES AND FOOD PRICES
Grains and vegetables prices have recently increased in Brazil, Russia and India: the increase in soybean and maize prices in Brazil is the result of the rise in the US dollar, which led to price increases for these products abroad and led domestic producers to export more, which also reinforced the demand for Brazilian products this year (the government is trying to stabilize the prices by strengthening imports); the unfavourable weather conditions for wheat production in Russia determined a price increase for the third week in a row; heavy rains have recently hit southern India, damaging the crops and making it difficult for trucks to transport vegetables, thus causing an increase in prices.
In order to limit further increases in soybean and maize prices, during a meeting with the Chamber of Foreign Trade and at the request of the Ministry of Agriculture and the Ministry of Economy, the government of Brazil has recently cancelled import tariffs for soybeans and maize to increase the supply of these products in the country. This exemption will be valid until January 15, 2021 for soybeans, and until March 31, 2021 for maize, and it does not provide for any quota limitation.
The Russian wheat export prices rose for the third consecutive week as the dry weather forecasts still raise concerns about production. The domestic wheat consumers are also becoming increasingly concerned about the rising prices, after wheat hit record highs last week in rouble terms, amid a weak Russian currency and high export prices. This is why the Russian association of poultry producers has recently asked the Ministry of Agriculture to regulate grain prices or provide additional subsidies.
Due to the heavy rains that have recently hit southern India and hampered production, vegetable prices have increased in several cities of the region, including Ernakulam in the state of Kerala and Chennai in the state of Tamil Nadu. For example, the rains have caused a shortage of onion supplies and therefore a price increase, due to the fact that the number of trucks that transport them from Karnataka, Andhra Pradesh and Telangana has reduced.
On the occasion of the World Food Day, both the government of the Philippines and that of Uganda have announced interesting initiatives aimed at improving food security levels in the respective countries: the Philippines’ Department of Agriculture developed a National Food Policy containing the government’s new strategies to improve sustainable food productivity (for example, using big data and developing urban agriculture), while Uganda’s Ministry of Agriculture announced the construction of several mechanization centres and food storage facilities across the country. Finally, India will soon approve a new bill that aims at establishing a barrier-free inter-state and intra-state independent agricultural trade that would benefit the farmers.
After the introduction of the three new farm laws, the Farmers’ Produce Trade and Commerce Act is being taken up this week in India. The bill aims at promoting an efficient and barrier-free inter-state and intra-state trade and commerce for farmers’ produce (outside the physical premises of the markets), and a facilitative framework for electronic trading. Furthermore, the bill would eliminate intermediaries, thus empowering farmers to freely sell their products to wholesalers, retailers or processors.
The government of the Philippines has recently launched the National Food Policy, whereby it renewed its commitment to end hunger and malnutrition on the occasion of the World Food Day. The Policy provides an outline of the country’s priorities, such as the development of new strategies aimed at increasing food productivity in a cost-efficient and sustainable way (for example, through the use of big data and new technologies that would benefit the whole food value chain).
On World Food Day, Uganda’s minister for agriculture, animal industry and fisheries has stated that the government of the country will set up 10 regional mechanization centers to improve food security levels by increasing agricultural productivity across Uganda. Furthermore, the government will partner with the private sector in order to build storage facilities in 193 areas of the country, where food will be stored after it is produced
The negotiations between the United Kingdom and the European Union on a future trade agreement from one side, and those between Egypt, Sudan and Ethiopia on how to operate the Grand Ethiopian Renaissance Dam on the other, have both reached a stalemate. Both the situations will have serious repercussions on all the parties involved, in case final agreements will not be reached: many UK exporters will have to shut down their businesses, while Sudan has already seen its water supplies shrink when Ethiopia began filling the dam in July. In America, on the other hand, despite the global pandemic, Peru has increased its fruit exports to the United States during the first 8 months of 2020.
The negotiations between Egypt, Sudan and Ethiopia on the way the Grand Ethiopian Renaissance Dam should be operated began nine years ago, and they have still come to nothing: the latest talks, under the auspices of the African Union, have also failed, and Ethiopia has begun filling the dam in July without any agreement. Sudan has immediately suffered some consequences: six drinking water stations were shut down in Khartoum in July, for lack of sufficient water.
Despite the negative repercussions of the lockdown measures imposed by governments around the world to limit the spread of the coronavirus pandemic, Peruvian agro-exports to the United States have increased by 4.7% between January and August to USD 1.2 billion. Peru mainly exported grapes, avocados, citrus fruits and cranberries to the US in the reporting period.
The talks on a future trade deal with the European Union were declared over toward the end of last week by the United Kingdom’s government. A hard Brexit will certainly impact on the Scottish agriculture and food and beverage sectors: for example, one of the consequences would be the requirement to have an export certificate for trading with the EU, which currently costs around GBP 95 for exports outside of the EU; in case the same price would be applied to the UK exporters, many businesses will not be viable anymore.