Three food supply chain updates in Europe, East Africa and the Middle East: the new coronavirus firebreak imposed in Wales by the local government will further affect the hospitality industry, according to the chairman of a Welsh food distribution company (which is likely to incur losses amounting to around GBP 2 million); Uganda’s agriculture and food system have suffered from the widespread disruptions to agricultural production and market access determined by the effects of the coronavirus pandemic; Syria’s food security crisis could be further aggravated by a looming shortage of wheat, which will require the country to import around 200,000 tons of this commodity.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
The chairman of a Welsh food distribution company (which had already suffered during the first wave of the pandemic) has recently claimed that the firebreak lockdown in Wales will result in a 40% pay cut for its workforce and in economic losses amounting to around GBP 2 million. According to the company, the UK’s hospitality sector should not be held responsible for the spread of the coronavirus, and thus the chairman called for the reopening of a Covid-responsible food-led hospitality at the end of the firebreak.
According to Uganda’s Ministry of Agriculture, agricultural input dealers have seen their sales curtailed by more than 40% due to the supply chain disruptions caused by the coronavirus pandemic, while medium and large-scale food producers and food processors were challenged with limited workforce. Furthermore, due to the decrease in consumers’ purchasing power, the demand for commodities such as eggs, vegetables and fruits went down, raising issues of increased food insecurity in the country.
According to Syria’s Ministry of Economy and Foreign Trade, the country will have to import up to 200,000 tons of wheat each month (which are likely to cost around USD 400 million) to make up for a domestic shortage. After almost 10 years of civil war, Syria’s economy is extremely weak, more than 10 million people are displaced and, according to the World Food Programme, around 9.3 million people are food insecure (1.4 million more than last year).
IMPACT ON COMMODITIES AND FOOD PRICES
Towards the end of September, banana prices in China experienced several fluctuations due to the unfavourable weather conditions, and to the fact that people were stocking up with supplies ahead of the National Day and the Mid-Autumn Festival holidays. However, the levels of banana consumption dropped after the end of these traditional celebrations, which contributed to the stabilization of banana prices in the country. On the other hand, the prices of tomatoes, chillies and wheat in Pakistan remain high, due to several reasons that include the lack of adequate storage facilities in the country, and the increase in energy prices.
The consumption levels of bananas in China have begun to decrease after the end of the Mid-Autumn Festival and the National Day, so that last week the prices of Chinese bananas have stopped decreasing and they have begun to stabilize. However, the quality of the fruit in some production areas was lower than normal, and a decrease in temperatures is causing a slower ripening of the bananas. For what concerns the demand for this fruit, consumer power keeps falling in China, while visiting traders are keeping the demand for top-quality bananas stable.
Food inflation increased by 14.7% year-on-year in Pakistan during September, and there are several factors that contributed to its growth. First of all, the lack of adequate storage facilities determined a hike in the prices of perishable commodities such as tomatoes and chillies. Second, the increase in energy prices, which had repercussions both on the costs of production and transportation. Finally, the huge increase in wheat prices, due to the shortage caused by the procurement failures in Sindh and Punjab, and to the export of 48,000 tons of wheat, despite the ban on wheat exports imposed in July 2019.
Panama and the United Kingdom have taken similar measures to stabilize food security levels in the aftermath of the first wave of the coronavirus pandemic: a network of food banks and pantries have been working to save crop surpluses that would have been wasted otherwise, and then they have distributed vegetables, legumes and fruits to people in need. Furthermore, the Knowledge and Innovation Community, established by the European Institute for Innovation and Technology, has funded a project that aims at providing dairy farmers in the UK with the appropriate digital tools to study the effects of external shocks on consumer demand and act accordingly, thus improving their resilience.
According to the FAO, 400,000 people in Panama can only eat once a day, while in the country’s largest food market 25 tons of food go to waste every day. In order to ease this major issue, Panama’s Food Bank and a joint-stock company that works for the development of a national cold chain have partnered in order to save tons of fruits, vegetables, legumes and other perishable items (that would have been wasted otherwise) and to distribute them to people in need.
EIT Food (a Knowledge and Innovation Community established by an independent body of the European Union) will fund a project that aims at supporting dairy farmers in the United Kingdom by providing them with digital tools that will make them more resilient to external shocks, such as the coronavirus pandemic. Thanks to these tools, dairy farmers will be able to adapt their business models to rapid changes in consumer demand (for example, using milk for cheese instead of dumping it when demand collapses).
Since the start of the coronavirus pandemic, many people in the Bath and North East Somerset district, UK, have lost their jobs and still find difficulties to afford adequate quantities of food. In order to support them, a network of food pantries has been collecting crops surpluses from farmers, supplying low-cost food to people in need in key locations around the district, and promoting healthy eating in the community.
A new survey conducted by the Food and Nutrition Security Resilience Programme has found out that the recurring droughts in the Horn of Africa are causes of both food insecurity and violence in the region: therefore, implementing drought-mitigating measures in countries like Somaliland would reduce conflicts between people scrambling for food and improve food security. For what concerns regional and international trade in the continent, on the other hand, the next EU-African Union summit (which was recently postponed due to the coronavirus pandemic) will represent an incentive for African countries to develop their manufacturing and improve the exports of finished products (and not just raw materials) to the European Union.
Droughts are external shocks that people in the Horn of Africa face recurrently, and that frequently lead to conflicts linked to the scramble for resources, due to the acute food insecurity in the region. Therefore, according to the Food and Nutrition Security Resilience Programme (funded by the Netherlands and implemented by the FAO), improving food security by investing in drought mitigation in the region is key to avoiding drought-related conflicts: in fact, food-secure pastoralists would minimize their movements in other territories, thus avoiding clashes with other pastoralists.
The African countries should aim at developing domestic and regional manufacturing in order to increase their exports to the European Union. A new strategic partnership between the EU and the African Union would make this possible: the EU-African Union summit scheduled for October was postponed because of the coronavirus pandemic, but it will be the occasion to renew such collaboration; however, the African countries should first ensure that their local firms meet the EU standards and have traceable supply chains.