All poultry farmers in the Netherlands have recently been asked to keep their birds indoor, after a hotspot of avian influenza was found in a farm and two swans have tested positive for H5N8 bird flu. Meanwhile, the United Kingdom’s hospitality industry is suffering from the new pandemic-related restrictions imposed by the country’s government (according to UKHospitality, the sales in the sector have already dropped by almost 50% between July and September), and it would be devastated by another national lockdown. Finally, China has recently suspended all imports from a specific Ecuadorian seafood product manufacturer, after traces of the novel coronavirus were found in frozen fish.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
After two swans were found positive for H5N8 bird flu, 35,000 broiler chickens will be culled in the Netherlands, due to an outbreak of bird flu in a farm. Furthermore, the country has already stopped the transports of eggs, live birds and other poultry products within a six-mile radius of the affected farm, and all Dutch poultry farmers have been ordered to keep their birds indoor to prevent them from contracting the illness from wild fowl.
According to the leading hospitality trade association in the United Kingdom, the sales in the hospitality sector have dropped almost by 50% in the third quarter of 2020, which corresponds to a decrease by GBP 17 billion year-on-year. Furthermore, according to the businesses leaders, a national lockdown in the country (where scientists warned that there will be half a million more Covid-19 cases each week) would be devastating for the industry, because it would cause further jobs losses and business failures.
China’s General Administration of Customs has temporarily suspended all imports from an Ecuadorian seafood product manufacturer, due to the finding of coronavirus traces on imported frozen fish. Normally, China suspends imports from companies for a week in case frozen food products test positive for coronavirus once, and for a month if a supplier’s products test positive for three (or more) times.
IMPACT ON COMMODITIES AND FOOD PRICES
Today’s media coverage offers a food prices overview in America: in Haiti, social unrest has recently increased, and assassinations, armed clashes and violent demonstrations affected food transportation and therefore food prices; soybean domestic prices keep increasing in Brazil, which is likely to eliminate specific import tariffs to increase food imports and stabilize the prices; Chicago maize slid on Friday, due to the concerns about the economic harm caused by the Covid-19 pandemic (although the market is poised for its third straight month of gains on the back of a strong international demand, especially from Mexico and China).
Despite a promising fall harvest, thanks to the passage of Hurricane Laura, which helped to maintain the soil sufficiently moist to promote the summer agricultural campaign, the deteriorating socio-political context in Haiti (due to recent assassinations, armed clashes and violent demonstrations) has led to road blockages and the closure of specific businesses in Port-au-Prince. This, in turn, had repercussions on food availability and access, which could also affect food prices.
As announced last week by Brazil’s president, the country will continue importing soybeans amid an increase in domestic prices (between January and September, soybean imports have totalled 528,000 tons). Furthermore, rising grains prices have recently added to food costs, fuelling inflation in Brazil. In order to stabilize food prices, the country’s Minister of the Economy has proposed to eliminate food import tariffs for other commodities besides soybeans.
Thanks to a strong demand, the American maize market has grown for three months in a row. However, due to the concerns about the economic harm caused by the rising Covid-19 cases and to the jitters over the upcoming US presidential election, maize prices have slightly decreased on Friday. Despite this, import demand is still strong, especially from Mexico and China, which is likely to limit further price decreases.
The World Bank Group’s International Finance Corporation has implemented many projects under its fast-track financing facility with a focus on helping small and medium-sized businesses to offset the negative effects of the coronavirus pandemic: for example, it strengthened services to hundreds of thousands of hospital and clinic patients in Uganda, and it enhanced the capacity of a Bangladeshi food company to produce affordable and quality food products. In Sub-Saharan Africa, the Eastern Africa Grain Council has developed a digital platform that provides valuable and timely weather information to the grain stakeholders in Eastern Africa, while Ghana’s Council for Scientific and Industrial Research is working towards the identification of new solutions to treat, recycle and reuse resources recovered from wastewater.
In March, the International Finance Corporation’s Board approved USD 8 billion in Covid-19 fast-track financing. Of these funds, USD 2 billion are expected to benefit people in the poorest countries of the world, and another USD 2 billion will support the fight against the coronavirus pandemic across other developing countries and emerging markets (such as Uganda, Nigeria, Bangladesh, Vietnam, Ukraine and Brazil). More in particular, the funds will be used by financial institutions to provide working capital, support jobs and facilitate trade.
The Eastern Africa Grain Council (a non-profit membership organization of the grain stakeholders in Eastern Africa) has recently launched a digital platform (the Climate Information for Grains tool), whose objective is to facilitate the access to climate information among the key players in the cereals’ value chain. To have an easy access to timely weather information is fundamental to improve the resilience of the region’s smallholder farmers engaged in the production of maize, beans, sorghum and green grams.
Ghana’s Council for Scientific and Industrial Research (CSIR) is leading a four-year partnership project that aims at finding new solutions to treat, recycle and reuse resources recovered from wastewater. In order to do this, the Council has engaged key stakeholders during a workshop in Accra to brief them about the project, so that they can contribute ideas, policies and strategies towards the achievement of a successful outcome.
India is currently experiencing a hike in the prices of common vegetables (such as onions), pulses and potatoes: for this reason, the country’s Directorate General of Foreign Trade has recently indicated that the government will continue the import of these commodities (more in particular, roughly 30,000 tons of potatoes will be imported from Bhutan over the next few days). Furthermore, India (together with Vietnam) is struggling with heavy rains that are causing floods and landslides, which have recently affected the production and the export of rice. Today’s media coverage also highlighted that the solar direct-drive fridges the Vaccine Alliance has delivered in 36 African countries could be particularly important for the storage of the future vaccine against Covid-19.
India is currently facing a shortage of potatoes due to the effects of the ongoing coronavirus pandemic, which has caused prices for the tuber to increase. In order to ease this shortage and stabilize potato prices, the country’s Directorate General of Foreign Trade allowed unhindered imports of potatoes from Bhutan without any licence until January 31, 2021, so that around 30,000 tons of potatoes will arrive from the country over the next few days.
Vietnam and India were hit by floods and landslides last week, which had negative repercussions on the production and transportation of rice in the countries. While the domestic demand for rice is increasing in Vietnam, supplies are thin, and export prices rose this week. In India, on the other hand, the unfavourable weather conditions (and the sharp rise in container freight rates) caused rice exports to slow down; however, a weaker rupee has allowed rice exporters to offer competitive prices.
Once a vaccine for Covid-19 becomes available, delivering millions of inoculations in Africa will be a demanding task, due to the fact that a cold chain distribution network for the vaccines will require low temperatures from manufacturers to airports to remote rural villages. However, the Vaccine Alliance has delivered more than 15,300 solar direct-drive fridges to 36 African countries since 2017, which can provide a standard cold storage at 2-8°C in rural health centres.