Food and Agriculture Organization of the United Nations
    FAO Data Lab

    Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.

    03 September 2020, Gaibandha, Bangladesh -MD. Sorwer (48) and his wife feeding their cattle supported by FAO at his home at Dokkhin Digholkandi, Holudia union 3.
    ©FAO/Saikat Mojumder

    FOOD CHAIN DISRUPTIONS

    Many poultry farmers in Nigeria (especially in the Ogun state) are in severe financial distress, as a shortage of soybeans and maize in the country caused a hike in prices for these raw materials (respectively up 193% and 89%). This reflected in a large increase in feed prices, which is forcing poultry farmers to sell out their produce or, in the worst cases, to shut down their farms. In Australia, on the other hand, most of the exporters of live lobsters chose to stop shipping to China, as the lengthy border controls (one of the consequences of the trade tensions between the two countries) were having repercussions on the health of the lobsters, which were being kept out of the water too long while waiting to be cleared.

    Hike in feed prices forces Nigerian poultry farmers to shut down their farms

    The Nigerian poultry farmers are currently facing financial straits as the price of poultry feed has increased greatly due to the shortage of soybean and maize (two main ingredients for poultry feed in Nigeria), so that they are often unable to feed their birds. In order to recoup their costs, many poultry farmers are selling off their birds at giveaway prices. Furthermore, 20% of all poultry farmers in the Ogun state had to shut down their farms, as a result of this hike in the costs of production.  

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    Australian businesses stop exporting to China due to trade tensions

    One of the consequences of the trade tensions between China and Australia is the fact that there are now extra checks for imported goods at the border. For example, the Australian exporters of live lobsters are slowly stopping to ship their products to China, as some of them claimed that the lengthy delays in customs testing (which are necessary to check the levels of cadmium in the shipments, according to China’s border officials) caused the crustaceans to die.

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    IMPACT ON COMMODITIES AND FOOD PRICES

    Food prices are increasing in southern Africa: more in particular, the South African consumers will face a hike in red meat prices until (and probably even beyond) December, which was justified by the rise in yellow maize prices (a main ingredient for livestock feed), while shoppers in Antananarivo have been finding expensive rice in Madagascar’s capital city’s retail markets, due to the retailers’ speculation on rice prices. In the United States, on the other hand, farmers are expanding the seedings of winter wheat for the first time in eight years, thanks to the stable import demand from China and to the decreasing supplies of the grain worldwide (due to the unfavourable weather conditions in other wheat producing countries).

    Increasing costs of production drive up red meat prices in South Africa

    Beef, pork, lamb and mutton prices in South Africa are currently the highest they have been in years, and according to the experts, this trend will continue in December. This hike in prices is caused by the increase in the costs of production (by 70% to 75%), because yellow maize prices (which is a major feed ingredient) are up 24% year-on-year. Furthermore, the demand for red meat has outweighed the slaughter rate in the South African livestock industry.

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    Antananarivo’s retailers accused of speculating on rice prices

    For the last two weeks, rice prices have been increasing in Antananarivo’s retail markets. According to Madagascar’s Ministry of Industry, Trade and Handicrafts, this hike in rice prices is unjustified and deliberately prompted by the vendors in Antananarivo’s markets. The Ministry has taken measures against the retailers that were unable to justify the high prices, and it also announced the arrival of boats carrying imported rice during the next six months.

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    US farmers plant more winter wheat as grain prices rally

    A strong demand and the dry weather in several wheat producing countries around the world are driving up the prices of the grain and encouraging the US farmers to expand seedings of winter wheat this autumn for the first time in eight years. This hike in prices comes as a relief for the farmers, after four years of global surplus grain stocks that have kept the prices low: in fact, the tightening wheat supplies worldwide and the strong demand from China are fuelling the US maize, soybean and wheat futures.

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    COUNTRIES' RESPONSE

    In Ghana, cashew farmers are already benefiting from the potentials of a new smartphone app that was developed by a large food and agribusiness company as part of a programme that aims at empowering farmers, who will have a better access to inputs, better prices for their products and farming advice (on the efficient use of land to fight climate change, for example). Meanwhile, the Indonesian government is trying to offset the negative effects of the coronavirus pandemic on the production of sugar (a shortage of supplies and price hikes) by collaborating with private and state-owned companies to boost the production of this commodity in the country. Finally, the United Kingdom’s wine and spirits industry will continue to benefit from free-tariff trade with Canada in 2021 and beyond.

    Smartphone app empowers Ghanaian cashew farmers to get better prices

    Thanks to a smartphone app that gives smallholder cashew farmers in Ghana the possibility to have direct access to the services of a large food and agribusiness company, they are getting better prices for their produce and reducing their costs of production: in fact, the app allows farmers to get prices directly from the company, rather than from the intermediaries. This is part of a wider programme that also provides farmers with a better access to agricultural inputs (such as fertilizers) and farming advice.

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    Indonesian government tries to lure investments for the improvement of sugar production

    Indonesia’s government is boosting the production of sugar in the country by attracting more investment in the industry, in order to avoid a potential shortage of this commodity (and therefore also hikes in prices) during the course of next year.  More in particular, the Ministry of Agriculture will partner with state-owned enterprises and private companies to intensify 200,000 hectares of land on Java island and to expand the acreage for sugar with an additional 50,000 hectares outside of the island, in order to raise the production by roughly 676,000 tons.

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    Tariff-free trade of wine and spirits between UK and Canada will continue unhindered

    The United Kingdom and Canada have recently agreed to establish a new bilateral trade deal in 2021, meaning that the export of GBP 11.4 billion worth of UK goods and services to Canada will continue unhindered. More in particular, since wine and spirits are among the 98% of goods that will continue to benefit from tariff-free trade and Canada is an important market for the UK gin and wine exporters, this is a good result for the British wine and spirits industry.

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    REGIONAL FOCUS

    In India, a Border Security Force official was recently arrested for his alleged role in a multimillion-dollar ring accused of smuggling cows across the border with Bangladesh. According to the FAO, in recent years smuggling in the region has fallen from one or two million cattle annually, to around 300,000, but after some of the coronavirus lockdown measures imposed by India’s government eased, smugglers are back at work again. In West Africa, on the other hand, a new sustainability campaign is planning to improve the livelihoods of millions of cocoa farmers in the region, by clarifying the regulatory frameworks on cocoa production and trade, and by developing new strategies to address the sector’s pricing challenges with relevant stakeholders.

    ASIA – Cattle-smuggling activities between India and Bangladesh resume after lockdown

    According to the Indian Border Security Force, there is a multimillion-dollar ring accused of smuggling cows across the border into Bangladesh from the Indian state of West Bengal. These smuggled cows pose health risks and undermine Bangladesh’s livestock industry, but several factors (including the porous borders and the involvement of security personnel) make it difficult to stop cattle smuggling.

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    AFRICA – Sustainability campaign aims at improving West African cocoa farmers’ livelihoods

    The Securing Equitable Living Income for Cocoa Farmers campaign seeks to eliminate extreme poverty among cocoa farmers in West Africa, by clarifying the regulatory frameworks governing cocoa production and trade, and by engaging relevant stakeholders to discuss and develop efficient strategies and roadmaps to address the pricing challenges in the cocoa industry.

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