The growing number of Covid-19 cases around the world may be driven by contaminated food imported from processing plants like the abattoirs in Germany and Australia, or the tuna canneries in Portugal and Ghana, where thousands of workers tested positive for SARS-CoV-2. Meanwhile, various indigenous tribes that live in the Papua and West Papua provinces of Indonesia are losing their livelihoods and their main sources of food because of deforestation. More in particular, companies sourcing palm oil give compensation to local tribes for the use of the land (at a price that is below its market value), which was previously used to grow different tropical palm stems from which the indigenous tribes extracted sago.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
The Mandobo tribe, in Indonesia’s Papua province, still follows an ancient tradition of eating sago, which is harvested from local palm trees once or twice a day and is fundamental for their diet. However, the Mandobo tribe and other indigenous peoples in the Papua and West Papua provinces fear that the deforestation to clear the way for commercial palm oil plantations poses a threat to their diets and culture. In fact, between 2001 and 2019 the Papua province lost about 420,600 hectares of forest (of which 83,400 hectares were turned into palm oil plantations), meaning that the indigenous peoples lost their livelihoods (hunting, fishing and gardening) and their main sources of food.
New cases of Covid-19 are re-emerging after weeks or months of no cases at all in some parts of the world, such as Vietnam, New Zealand and Beijing: these new outbreaks, according to a recent study, may be caused by foodborne contamination. For example, after two months of having zero new cases, a new outbreak sprouted in a wholesale market in Beijing, and it was officially attributed to contaminated food imported from outside the region. This can be traced to the numerous Covid-19 cases in meat and seafood processing plants around the world, such as a poultry processing factory in the UK, tuna canneries in Portugal and Ghana, abattoirs in Australia and Germany, and so on.
IMPACT ON COMMODITIES AND FOOD PRICES
In the United States, a derecho windstorm (a widespread wind storm that is generally associated with thunderstorms and can cause flash floods) has substantially damaged the crops in Iowa and Illinois, and the dry weather is slowing down the production of soybean and maize in the Midwest; however, the American exporters can still rely on a strong import demand from China. Furthermore, the US dairy industry could face serious difficulties as food service is hampered by a plausible second wave of the coronavirus pandemic. Meanwhile, fruit and vegetable prices in India have been growing on the consumer side, raising food insecurity levels in the Haryana state.
The coronavirus pandemic has widened the gap between farm gate and end consumer price in India’s food system. In fact, between April and July, many farmers in the Indian state of Haryana incurred heavy losses as most vegetables sold for less than INR 5 per kg; on the other hand, prices have been soaring at the consumer end of the food supply pipeline, because of the higher transportation costs (food prices rose by 9.6%, and the headline consumer price inflation shot up to 6.9% in July). Many people cannot afford basic commodities anymore, and 100 million eligible Indians were excluded from the federal food security scheme.
Dry weather in parts of the US Midwest could curb the country’s maize and soybean yields. However, for the moment the Chinese demand for soybean is particularly strong, and American exporters reported selling around 192,000 tons of soybeans for delivery to China during the 2020/2021 marketing year (however, according to the US Department of Agriculture, there are no new trade talks scheduled with China for the moment). The analysts have observed strong corn yield prospects in Ohio and South Dakota, while farmers in Iowa and Illinois are facing the aftermath of a powerful derecho windstorm that ravaged millions of acres of crops.
The dairy sector is notoriously price inelastic, meaning that small changes in the demand and supply dynamics may cause major price movements. In fact, milk prices have been falling since mid-July in the United States, when restaurants were instructed to cut back on their openings once again; furthermore, food service could be negatively affected by the fact that, because of a plausible second wave of the coronavirus pandemic, schools and colleges will open this fall with virtual learning and high school fall sports will be cancelled.
A new blockchain platform may be adopted by the Australian and Chinese governments to streamline the trade in seafood and meat, now that China is tightening the rules concerning fresh food imports to limit the spread of the coronavirus pandemic. The country has also improved the regulations that aim at reducing illegal fishing activities, in an effort to improve the maritime ecosystems (upon which the employment and food security of 60 million people depend). In Kenya, the government is planning to improve the production of cashew nuts by offering high-yielding seedlings and better agronomy services to farmers.
An Australian company that connects fishers and farmers to the retail industry and to importers has developed a blockchain platform that will remove all intermediaries along the supply chain between food producers and end users, which could be used to smoothen meat and seafood exports to China by certifying that they are not contaminated with the coronavirus. The platform allows for an immediate input of information about colour, quality and pricing onto a digital marketplace to be scrutinized. The company is working on approaching the Australian and Chinese governments to work out how to incorporate its technology to the latter’s new requirements for imported food.
For years, China’s distant-water fishing fleet (that consists of around 2,900 units) has been engaged in illegal fishing activities. However, the country’s government is tightening the rules that govern these vessels for the first time in 17 years (including those that entail harsher penalties for captains and companies that break the law). The new regulations will all take effect between January 2020 and January 2021, and will determine substantial changes to the ocean health, considering that China is responsible for around 15% of the world’s reported wild fish catch. This is fundamental for both the marine ecosystems and humans (fisheries provide employment for almost 60 million people globally).
In Kenya, there has been an overall reduction in cashew production volumes due to ageing trees, inadequate agronomy and extension services, weak farmer organizations and a poor regulatory environment. However, the government is planning to reach 700,000 cashew farmers in the next seven years, in order to increase the production to more than 200,000 tons per year (against the current 12,848 tons). It will achieve such objective by offering quality seedlings and services to farmers, and by streamlining the cashew value chain to increase production and incomes.
Five different development projects funded by the UK Space Agency aim at tackling various global development issues in three different African countries: they will support the harvesting, transport and processing of maize in Ghana, the eradication of forced labour and human trafficking in Uganda, and the improvement and protection of the geothermal sector and of biodiversity in Kenya. In Guatemala, narco-trafficking in causing the deforestation of large swathes of tropical forests, in order to raise cattle that is sold in Mexico to launder the earnings from illegal drug trade.
The UK Space Agency as announced a GBP 3.4 million funding for 10 development projects that tackle global development issues, such as the spread of malaria, human trafficking and forced labour. Five of these projects were selected to be hosted in African countries: the first provides information on maize yields in Ghana; the second tackles human trafficking and force labour in Uganda; the third and fourth aim at improving the management of Kenya’s sand resources and geothermal power plants; the fifth will tackle the loss of Kenya’s biodiversity by reducing the degradation of habitats.
In Central America, tropical forests are threatened by narco-trafficking, which causes deforestation in order to create airstrips where drugs are flown in, or to create pastureland for cattle that is later sold in Mexico to launder the illegal drug proceeds. Much of the protected land in the northern part of Guatemala has been affected by narco-trafficking, while instead they could have been used for the production of drugs derived from plants to treat cancer and diabetes. Furthermore, tropical forests are important because they sequester carbon, thus regulating the global climate systems.