While many restaurants in North Carolina still find difficulties sourcing specialty food products because of the consequences of the coronavirus pandemic (e.g. beef, chicken, lobsters, oysters and specific kinds of cheese), the meat processors in the United Kingdom are worried that, even when the United Kingdom will be recognized as a third country by the European Union after the end of the Brexit transition period, they will have to wait in line in order to undergo the physical inspections that are necessary to export food products to the European Union.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
As a consequence of the coronavirus pandemic, specialty items in the United States are still tough to source for some restaurants. For example, lobster and oyster trade were particularly impacted by the pandemic: when all restaurants shut down in North Carolina, a lot of farmers let the oysters grow much larger than usual, but for some of the specialty oysters used in restaurants, bigger is not necessarily better. Other restaurants in the state are in short supply of beef, chicken, cheese, and even labour.
The British Meat Processors Association is calling on the UK prime minister to initiate a firm plan for the future British exports. Even after gaining third country status after 31 December, individual food manufacturing plants in the United Kingdom will have to be formally approved by the European Union, based on the results of a physical inspection of every plant. However, if inspections are deemed necessary, the British food manufacturers could have to wait in line for formal listing before they can export anything to the EU, thus losing more and more orders.
IMPACT ON COMMODITIES AND FOOD PRICES
Wheat prices are still increasing in Pakistan, which is facing a long-lasting wheat shortage caused by multiple factors (including unfavourable weather conditions and locust swarms in early 2020, and the coronavirus pandemic), and despite the federal government’s decision to import large quantities of wheat, only two provinces in the country have officially confirmed the purchases. In the neighbouring India, vegetable and fruit traders are lamenting the presence of too many street vendors, and a shortage in supply, which is causing an increase in prices. Finally, Chile saw its fruit exports decrease between January and August 2020.
The official figures of the Pakistan Bureau of Statistics showed an increase in wheat prices by over 2% in the past week alone: wheat is currently being sold at PKR 56 per kilogramme, and wheat flour at around PKR 68 per kilogramme. Early last month, the federal government allowed the import of 1.5 million tons of wheat, but only the Sindh and Khyber Pakhtunkhwa provinces confirmed the purchase of the imported wheat, while Punjab has not taken a final decision and asked for a lower import price.
According to the Office of Agricultural Studies and Policies of Chile’s Ministry of Agriculture, the country’s fruit exports between January and August 2020 fell by 7% in volume, and by 11% in value year-on-year, totalling 2.62 million tons and almost 5 billion dollars free on board. The main fruit that was exported during this period was grapes, while the most important destinations for this product were the United States and China (respectively 45% and 18% of the total value of grape shipments).
Despite the easing of the lockdown restrictions in India, fruits and vegetable traders at the Tripunithura market in Kochi (southern India) are currently complaining about a reduced demand and a shortage of supply, which are causing a hike in prices. Furthermore, the number of street vendors selling vegetables, fish and eggs has increased during the lockdown, and along with Covid-19 (which caused labour shortages in food producing regions of the country), that has also contributed to the fewer sales for traders in the markets.
The European Union is assisting smallholder farmers in Zambia and Zimbabwe, with the objective of creating decent employment opportunities for women and the youth in order to mitigate the disruptive effects of the coronavirus pandemic in Zambia, and in order to create a robust and competitive beef value chain that promotes enhanced trade and food security in Zimbabwe. In Ethiopia, on the other hand, the World Bank is achieving progress in poverty eradication by improving agricultural productivity in the country.
Livestock rearing has been the backbone of many African communities for centuries, and it remains a major asset for smallholder farmers in Zimbabwe, which is currently focusing on shifting from livestock rearing for own needs to cattle productivity that contributes to the growth of the formal beef markets. Thanks to the European Union’s projects under the Zimbabwe Agricultural Growth Programme, this objective may be reached in the near future by supporting small and medium cattle producers in 10 districts across the country.
A new agribusiness development project worth EUR 25.9 million was developed by the European Union and has launched its first call for proposals. The project seeks to benefit around 150,000 smallholder farmers in Zambia with particular attention to the creation of decent employment opportunities for women and youth, in order to tackle the challenges presented by the coronavirus pandemic, and with the additional intent to promote more sustainable and climate change resilient agri-food systems.
The World Bank has recently approved a USD 80 million grant for the Second Agricultural Growth Project, to support Ethiopia to boost its agricultural productivity and improve the market access for many smallholder farmers in the country. The project has already made notable contributions to poverty reduction in Ethiopia, by promoting the use of irrigation and thus enabling farmers to harvest two or three crops in a year, as opposed to a single crop under rain fed conditions.
Most of the West African countries are reliant on rice imports from Asia, but some of them have undertaken to attain self-sufficiency in the near future: for example, Nigeria has reduced its imports between 2013 and 2019 by implementing a steep tax increase on imported grains and by closing the nation’s borders to prevent rice from being smuggled into the country (mostly from Benin). Mali, on the other hand, constitutes a historical exception, since it has largely been able to maintain self-sufficiency (in 2018 it produced more than 3 million tons of rice).
Trade is vital for Africa’s development and to generate enough jobs to absorb the 17 million young people who enter the labour market every year. However, for too long global trade regulations have failed to work in the interest of development: in fact, the World Trade Organization has largely benefited countries that had already industrialized, without taking the developing world’s circumstances into account. Three of the eight contenders to the current director-general of the WTO are African: the election of one of them might represent the chance to turn the tables.
Senegal, the Ivory Coast and Cameroon cumulatively spend around FCFA 653 billion annually on rice imports (primarily coming from Asia) to make up for their production shortfall. However, they have recently undertaken to attain self-sufficiency, because rice consumption has quadrupled in 30 years in West Africa. Since 2015, Nigeria has taken significant steps to reduce its reliance on food imports (with a focus on rice), by implementing a steep tax increase on imported grains and by blocking food importers’ requests for foreign currency.