Despite the “Clean Plate” campaign launched by China’s president to fight food waste and safeguard the country’s food supplies, China is still severely affected by the floods in the Yangtze River basin (which is the biggest rice producing area in the country), that curtailed food production in the country and determined heavy food price fluctuations. The rural areas in central and northern Chile, on the other hand, are suffering from the worst drought in years, which prevents vulnerable households from performing their basic tasks, while Hurricane Sally has devastated maize, soybean, peanut and cotton fields in Alabama.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
The recent deluge in the Yangtze River basin (the main rice producing area in China) and the reduction in food production and imports (aggravated by the country’s deteriorating diplomatic relations) are still affecting food supply in China, despite the launch of the “Clean Plate” campaign, which aims at reducing food waste in order to ensure that the country’s food supplies do not deplete quickly. This, in turn, is impacting on food prices, which have increased by 10% on a year-on-year basis, while China’s GDP may fall by nearly a percentage point during the third quarter of 2020, with losses amounting to USD 1.7 billion in the agriculture output.
Chile is currently suffering the worst drought in its history, because of a reduced rainfall and a lack of a proper infrastructure that would allow water to reach the households. The drought is affecting around 76% of the country’s surface area: more in particular, a recent survey underlined that, on average, 80% of the rural households living in 26 municipalities in northern and central Chile are vulnerable to the drought, meaning that the tanker trucks carrying water are not sufficient for their day-to-day duties and for their agricultural activities.
Last week, Hurricane Sally flooded farmers’ fields in Alabama, ravaging crops and destroying structures, further affecting agricultural markets, trade and supply chains amid the disruptions already caused by the coronavirus pandemic. More in particular, farmers in the state reported heavy damages to cotton, soybean, maize and peanut fields, but the total economic losses still have to be estimated.
IMPACT ON COMMODITIES AND FOOD PRICES
A global grains production and exports overview: the United Kingdom recorded lower wheat and barley yields in 2020 (which may be reflected in higher prices in the spring), but the production estimates for 2021 are optimistic; while the EU countries faced low grains production levels that implied reduced exports, Russia has vastly increased its barley exports, especially to Saudi Arabia (which purchased around 800,000 tons); Pakistan is still facing a severe wheat shortage that sharply raised prices, and the country has not managed yet to reach the wheat import target that is necessary to ease the supply deficit.
The lower wheat, barley and oilseed rape yields during 2020 in the United Kingdom (confirmed by the first cereal quality results, that include samples up to mid-August and highlight the effect of a difficult growing season) will probably entail higher prices in the spring, but there is the possibility for the UK’s wheat area to rebound in 2021: there is still a strong economic incentive for farmers to plant oilseed rape, but the 2021 gross margin estimates in the country support the potential for a rebound in the wheat area for the next harvest.
Since early July, Russia has sharply increased its barley exports, thanks to the high demand for this grain that strengthened both the domestic and the export prices, and to the parallel decrease in barley exports from the European countries: more in particular, barley exports from Russia increased by 50% to more than 1.5 million tons between July 1 and September 15. The main destination for such exports was Saudi Arabia, which imported 817,000 tons, accounting for 54% of the volume of barley exports from Russia.
Pakistan’s federal government has recently scrapped a tender for the import of 150,000 tons of wheat (which would have been part of the 1.5 million tons the government allowed to import in June in order to ease the wheat shortage in the country) because of an allegation of collusion between importers, who quoted bids of around USD 274 per ton (while the price quoted in the previous import tender was USD 233 per ton). Meanwhile, owing to the increasing shortage and fewer supplies of wheat, the prices are constantly increasing.
Three examples of countries’ measures to boost productivity in the agricultural sector and provide support to smallholder farmers in the Middle East and South Asia: India’s parliament has passed three new bills that will make it easier for farmers to sell their produce directly to big buyers and to have access to better infrastructure; the Philippines’ Department of Agriculture has invested around PHP 262.7 million to increase the production of bananas in the country by fighting the fusarium wilt; one of Pakistan’s top rice exporters has organized a workshop to provide capacity training to rice farmers and sensitize them about the fundamental rights of female workers.
Three new agriculture-related bills were passed last week in India: the Farmers’ Produce Trade and Commerce Bill, the Farmers Agreement of Price Assurance and Farm Services Bill, and the Essential Commodities (Amendment) Bill. These reforms will accelerate growth in the sector through private sector investment in building infrastructure and supply chains for farm produce in national and global markets, and they are intended to help smallholder farmers who don’t have the means to bargain for their products or invest in technology to improve productivity.
The Philippines’ Department of Agriculture has allotted a total of PHP 262.7 million to produce banana varieties that are resistant to the fusarium wilt, a fungal disease that mainly affects tomatoes, tobacco, legumes, cucurbits, sweet potatoes and bananas. This and other development initiatives are meant to increase the productivity of the country’s banana plantations for both the domestic and the export markets. The new banana varieties will be produced through tissue culture, and then distributed to the farmers.
One of the top rice exporters in Pakistan, in collaboration with two Swiss development organizations, has organized a safety and capacity building training workshop for rice millers and other agriculture sector stakeholders within the rice value chain, especially to protect the labor rights of woman rice transplanters. During the workshop, more than 28,000 farmers were trained on sustainable rice production and sensitized about the fundamental rights of the female agriculture workers and their children.
Southern Africa has experienced erratic rainfall and rising temperatures that determined recurring droughts and floods, which affected the water, agriculture and energy businesses, threatening farmers’ livelihoods and the existing crop and livestock systems. Furthermore, such climate-related phenomena (together with several other factors) contribute to the unstable agricultural production that characterizes at least 13 countries in this region, causing decreasing food security levels for nearly 45 million people (in South Africa, for example, where 7500 children die from hunger each year). Meanwhile, Latin America’s fisheries sectors have been heavily affected by the negative consequences of the coronavirus pandemic on transportation and trade, which reflected on the livelihoods of fishermen and fish farmers.
Southern Africa is a climate crisis hotspot, meaning that while the global average air temperature has risen by nearly 1°C, temperature increases in southern Africa have been double that. The International Water Management Institute, together with USAID and other stakeholders, are co-hosting the Two Degree Initiative to leverage finance in order to improve climate resilience in Botswana, eSwatini, Lesotho, Madagascar, Malawi, Mozambique, Namibia, Zambia and Zimbabwe.
Around 45 million people in 13 countries of the southern African region suffer from food-insecurity. In South Africa, for example, nearly 7500 children under the age of five die from hunger annually, and one in four children are stunted, meaning that they are too short for their age due to malnutrition. Furthermore, nearly 80% of South African households don’t spend enough money for basic nutritious food items, because they do not have enough money to purchase food.
The fisheries sector in Latin America has been severely affected by the volatility of demand, the worsened market access and the logistical problems (determined by border closures), all caused by the coronavirus pandemic. This impacted on the livelihoods of the fishermen and fish farmers, and on food security levels for all populations that depend on fish supply in the region. For example, the sales in this sector decreased by 85% during April in Mexico, because of the shutdowns in the hospitality industry and the drop in exports.