The conditions of many seafarers worldwide are currently deteriorating, because they have been stranded on the ships they operate since the beginning of the coronavirus pandemic, due to port and border closures. This may affect the global supply of several kinds of goods, especially since retail stores in countries like the United States have planned very conservatively in the spring, and therefore they are likely to face shortages in the winter, since consumer spending is showing an unexpected resilience. Meanwhile, Somalia is experiencing issues in transporting goods between the cities of Hargeisa and Lughaya, due to a heavy downpour that damaged the road links.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
The flow of goods (including food and medicines) transported by ships has remained uninterrupted for the first 8 months of the global coronavirus pandemic. However, 20% of the 1.6 million seafarers that globally operate these vessels are stranded, due to closed ports and borders, and cut air flights (more than 120 countries have stopped or limited access to ships for seafarer crew changes to prevent the spread of the coronavirus), and nearly 40 active seafarers described deteriorating conditions.
The US retailers are finding difficulties in stocking their shelves for the crucial winter holiday shopping season, because they slashed orders for merchandise at the height of the coronavirus lockdown in the spring, only to face an unexpected resilience in consumer spending, that is creating shortages for specific goods in the country. In fact, by the end of July the inventories of many US retailers recorded a 9% decline year-on-year.
A heavy rainfall in northwest Somalia is making it impossible for trucks (which get stuck in loamy soil) to carry goods between the cities of Hargeisa and Lughaya: due to the limited supply, the whole region is experiencing a sugar shortage and the prices of several commodities are increasing. For example, white sorghum and camel milk prices are very high in some of the markets in Somaliland, while livestock prices are decreasing amid a low demand.
IMPACT ON COMMODITIES AND FOOD PRICES
The demand for pulses in India and for palm oil in Malaysia and Indonesia is increasing, despite the shortages both countries are facing because of heavy downpours and lack of workforce caused by the restriction measures imposed to limit the spread of the coronavirus pandemic. Poultry farms in Myanmar have been similarly affected by the negative effects of the global pandemic, and now production costs are outweighing broiler chicken prices in the country, causing heavy economic losses for the Burmese breeders.
Retail prices of most grocery items, such as pulses and edible oil, have increased in the city of Pune (western India), due to an increase in public demand, despite the fact that most restaurants are still closed (after they had to shut down because of the coronavirus pandemic in March), and that the state of Maharashtra is currently facing a supply shortage caused by the heavy rains. More in particular, the household demand for chana dal (chickpeas) has largely increased, probably because it is used to prepare the food kits that are donated during the Covid-19 outbreaks.
Breeding and production costs in Myanmar’s poultry farms are currently higher than the prices of broiler chicken, due to the ongoing effects of the coronavirus pandemic on demand, so that breeders in the country are currently incurring in daily losses worth around MMK 50 million. Since such losses are projected to continue, and with Covid-19 cases on the rise, poultry breeders in Myanmar have started reducing the production rate.
Many palm oil planters in Indonesia and Malaysia are suffering a substantial shortage of workers due to the coronavirus pandemic, which is affecting the production: a tighter supply and a higher demand for crude palm oil are likely to determine a price increase for the edible oil. Furthermore, the likelihood of La Niña (a weather phenomenon that will cause heavy rains from September to November in Southeast Asia) has increased to 60%, damping any prospects of higher crop production towards the end of 2020.
In the United Kingdom, an agri-food innovation company has developed a new robotic device that improves the monitoring of cereals and grains while they are still in storage, and it is expected to reduce post-harvest losses by saving a total of 380 tons of wheat and barley every year. In Zimbabwe, on the other hand, the government has developed a strategy that aims at increasing the domestic production of maize, wheat and sorghum by implementing new irrigation schemes in the rural communities. Finally, the European Investment Bank is supporting Morocco’s agricultural development strategy (whereby the country plans to double its agricultural GDP by 2030) by providing a EUR 200 million financing.
As part of a solution to tackle post-harvest storage losses in the United Kingdom, an agri-food innovation company developed a robotic device that “swims” through bulk solids such as cereals and grains in order to constantly monitor their condition even while they are still in storage, thus allowing for a better understanding of the real quality of the stored grains. This device is expected to be able to save a total of 380 tons of wheat and barley every year, helping farmers face droughts and heavy rains.
Zimbabwe’s Agriculture and Food Systems Recovery Strategy aims at increasing maize, wheat and soybean production in the country in order to meet the domestic demand and to export any surplus. The strategy plans to reach this objective by implementing irrigation schemes especially in rural communities: 467 pipes already link the engine water pumps from the Zambezi River to the overnight storage dams, and 100,000 hectares of land will be transformed into a greenbelt for maize over the next three years.
The European Investment Bank (EIB) and the Crédit Agricole du Maroc have signed a financing agreement of EUR 200 million to support Moroccan companies in the bioeconomy and agriculture sectors. This financing supports Morocco’s new agricultural development strategy, which aims at doubling the country’s agricultural GDP and agricultural exports, and at creating 350,000 jobs by 2030. Furthermore, the EIB will provide technical assistance to the Crédit Agricole du Maroc to support the digitization of the processes in the value chain.
While policy and regulatory issues seem to be an obstacle to digital transformation in Africa, Nestlé has identified in the Asian countries’ tropical climates a challenge to the creation of sustainable food packaging options: for example, recyclable paper packaging was used to wrap individual bouillon cubes in France, but the same kind of packaging cannot be reciprocated for a similar product in Indonesia, even if it represents a key market for that food product. Meanwhile, most of the Central and Latin American ports are facing major difficulties caused by the restrictions to movement that are necessary to limit the spread of the coronavirus pandemic in the region.
The largest food company in the world has identified in the tropical climate of many Asian countries a major challenge to the development of sustainable food packaging options for the region. Food packaging protects food products along their journey to the consumers by ensuring food safety and quality, but some specific types of packaging (for example, recyclable paper packaging) may achieve this objective only in certain geographical contexts.
82% of all Central and South American ports recorded a negative impact of the coronavirus pandemic on infrastructure development, and they are the ones that faced the worst labour shortages in the world. Furthermore, these harbours are among the worst in the world for what concerns seafarers crew changes, and 47% of them suffered delays with regard to the entry and exit of trucks carrying goods to the hinterland.
Digital infrastructure development is fundamental for Africa not just to survive the current pandemic, but to thrive, while public-private partnerships may play a critical role in accelerating digital transformation. For example, they could serve to accelerate conversations around key country policies: in South Africa, Microsoft commissioned a leading research institution to identify opportunities within the agriculture industry and detect key policy issues that the country needs to address in order to maximize the benefits of technology.