In Nigeria, the recent heavy rainfall that hit the River Niger basin caused floods that impacted on the sugar production of a nearby processing plant. Meanwhile, farmers and producers in Indonesia and in Nebraska are still suffering from the disruptive effects of the coronavirus pandemic on agriculture: Indonesian coffee farmers are struggling with a low domestic and foreign demand for coffee, which is making it difficult for them to sell their stored produce, while farmers in Nebraska would have lost around USD 4 billion without the government’s financial support (USD 1.1 billion in corn and soybeans, almost another USD 1 billion for beef producers, and the rest in pork, dairy products and wheat).
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
As a result of the heavy downpours that hit the northern and central parts of the River Niger basin, a sugar estate that features 17,000 hectares of irrigable farmland and a sugar mill that processes 4500 tons of sugarcane per day in Nigeria suffered disruptions to its operations caused by floods. The actual state of damage to the sugarcane crop will be assessed only once the floodwater subsides.
Indonesia, which is the world’s fourth-largest coffee producer, saw its household spending decrease by 5.51% year-on-year due to the pandemic, which negatively impacted on coffee consumption: in fact, there are tons of coffee in the country that are being held under a warehouse receipt, which the farmers cannot sell because the offered price is too low and there are few buyers in the export market. Indonesian coffee farmers and producers are therefore urging the government to provide more support.
A new report from the Nebraska Farm Bureau confirms the extent of the pandemic-induced disruptions on the state’s agriculture. In March, farmers and ethanol plants faced an abundant oversupply of products and a lack of buyers; then, COVID-19 caused severe disruptions to meatpacking plants (20 meat processors in Nebraska witnessed coronavirus outbreaks). Without federal aid, farmers in Nebraska could have seen up to USD 3.7 billion in losses.
IMPACT ON COMMODITIES AND FOOD PRICES
Vegetable prices (ginger, tomato, aubergine, onion, among the others) have increased over the last week both in Pakistan and Bangladesh, respectively due to the decreased imports from China and to the disruptions caused by the monsoon rains. However, wheat prices in Pakistan are finally starting to decrease as more substantial imports from Ukraine are slowly arriving to the Karachi Port. Meanwhile, the production of sweet potatoes in Egypt has increased by 20% to 30% this summer, and now the country is exporting this product to Europe at very low prices (below Spain’s production costs for sweet potato).
The prices of ginger and tomato have recently increased in Karachi. According to the traders, ginger prices swelled due to the combined effect of a low domestic production and decreased imports from China (therefore, importers are now purchasing ginger from Thailand to cover the supply gap). On the other hand, flour prices are slowly decreasing as wheat imports from Ukraine are arriving to the Karachi Port and they are being transported to all over Pakistan.
Onion and rice prices have further increased over the week in Dhaka’s markets as the monsoon rains have damaged farmlands of summer vegetables in the country. Furthermore, the prices of most vegetables increased by between BDT 5 and 10 a kg in the city over the week for the same reason, including aubergine, cucumber, tomato and green chilli.
The acreage devoted to the production of sweet potatoes in Spain has shrunk by 10% to 15% (so that prices are currently under pressure), due to the increasing competition from Egypt, which sells this product to markets like the Netherlands at prices that are below Spain’s production costs. Furthermore, production costs have increased by 30% in the country, as a result of the shutdowns in the hospitality industry and the implementation of the measures that prevent the spread of the coronavirus.
In Ghana, a new cassava processing facility that will be established thanks to the financial support provided by the European Union and several non-profit organizations will improve production by contracting many farmers and provide training to young processors. Furthermore, the country’s government has undertaken to boost the economic growth of the fisheries sector by expanding an aquaculture development program that has already created more than 10,000 jobs last year. Pakistan, on the other hand, is on a path to improve its agricultural data collection and dissemination systems, which are crucial to the monitoring of food security levels in the country and to the improvement of planning and policymaking in this respect.
In order to improve planning and policymaking, Pakistan’s prime minister has urged the food security ministry and all four provinces in the country to take measures to improve the accuracy of the agriculture supply chain data collection for the production, consumption, waste, imports and exports of different commodities. Furthermore, he directed the ministry to develop a food security dashboard for an effective transmission of information to all stakeholders in a transparent manner.
In Ghana’s Western Region, a new cassava processing center has been commissioned with funding from the European Union and other non-profit organizations. The facility will produce a variety of different finished products, including garri, which is a specific kind of flour that is made from the tuberous roots of the cassava plant. Furthermore, the center will provide training to young processors and contract around 600 farmers to produce cassava to feed the facility.
Ghana’s government has recently renewed its commitment to promote economic growth and create jobs in the aquaculture sector, which is crucial to the country’s economy as it employs around 10% of the entire population. The Aquaculture for Food and Jobs initiative (which trained and supported over 10,200 unemployed youth in fish farming last year) was expanded to a next phase to this effect, so that an estimated 7000 additional jobs will be created and 33,628 tons of additional fish will be produced.
The onset of the new rice harvests in South and Southeast Asia is driving rice prices down in Vietnam and Thailand, while the Philippines halted its rice imports from Vietnam and India is witnessing a weak demand for this crop and a price decrease due to a depreciated rupee. In Latin America, on the other hand, around 300 trucks carrying bananas and meat from Paraguay to Chile were recently blocked in Argentina by demonstrators, while the women-led shea butter market in West Africa is suffering due to the global pandemic, but it could largely benefit from the implementation of the African Continental Free Trade Area Agreement.
Since the autumn-winter harvest has started in the Mekong Delta, rice prices are decreasing in Vietnam, and they are expected to fall further when the harvest peaks in October. Meanwhile, the Philippines stopped purchasing the crop from Vietnam, and according to many traders, the country may not resume its imports until next month. The new crops could push prices down in Thailand, too, while in India (the top rice exporting country) rice prices are decreasing due to a depreciation in the rupee and to weak demand.
Although the member states of the Mercosur signed an agreement to allow for the free passage of goods amid the global coronavirus pandemic, a group of demonstrators in the Formosa Province is blocking one Argentina’s national routes, thus preventing 300 trucks coming from Paraguay and loaded with tons of meat and bananas from reaching Chile. The demonstrators are asking the government to ease the restrictions to movement imposed by Argentina’s government in the Formosa Province, following a hike in COVID-19 cases.
The traditionally women-led shea market in West Africa is facing increasing uncertainties exacerbated by the coronavirus pandemic, which made the 16 million women throughout Sub-Saharan Africa who rely on revenues from shea nuts and shea butter more vulnerable. A huge help could come from the African Continental Free Trade Area Agreement, thanks to which 55 member countries would remove tariffs from 90% of goods, including shea products (currently, tariffs on raw shea butter are between 10% and 40%).