The ongoing conflict between Ethiopia and the Tigray People’s Liberation Front is currently causing food shortages for more than 700,000 people (including 100,000 refugees from Eritrea that live in the Tigray region). In Jamaica, on the other hand, the recent unfavourable weather conditions have damaged vegetables crops (lettuce, cabbage, cucumbers and tomatoes) and caused a possible break in the supply chain of these products. Finally, the coronavirus pandemic and Brexit, with all their consequences (restrictions to movement and trade, increase in trade tariffs and rising unemployment rates, among the others), are hindering Spain’s wine exports, so that the country will have to secure new markets in Europe.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
Tigray’s population is currently under threat, as the Ethiopian Prime Minister has recently announced a final phase of the three-week conflict in the region (in case the Tigray People’s Liberation Front does not accept the Ethiopian government’s ultimatum). Furthermore, fuel and cash are running out in Tigray, and more than 600,000 people (in addition to 100,000 refugees from Eritrea) who rely on food rations have not received them in November, due to the travel blockages between the region and the rest of Ethiopia.
According to Jamaica’s Ministry of Agriculture, the recent heavy rains have damaged tomatoes, cucumbers, lettuce and cabbage, and therefore it expects a break in the supply chain in relation to these crops. The Rural Agricultural Development Authority will begin the assessment of the availability of these products, in order to see how bad the break in the supply chain is, and if there needs to be an alternative way to ensure that the country has sufficient supplies in the run up to Christmas.
The coronavirus pandemic (which caused rising unemployment and restrictions to movement) and the impending end of the Brexit transition period have both slowed down Spain’s wine exports to the United Kingdom (one of the largest importers in the European market). Therefore, the country will have to secure new importers in Europe, such as Poland and Ireland.
IMPACT ON COMMODITIES AND FOOD PRICES
Soybean prices continue their upward trend both in China and in the United States, due to the snowfalls and rains in China and on the back of the tightening of global soybean supplies (caused by the dry weather in major producing countries in South America). On the other hand, rice prices are decreasing in Pakistan, thanks to the appreciation of the country’s currency, to a reduction in international demand and to the fact that the country had to adjust to India’s lower export prices for rice. Finally, Madagascar has set a minimum export price for vanilla that is higher by 50% than the current market value of this commodity, and this could bring importing countries to source the spice from other producing countries, such as Indonesia or Papua New Guinea.
This week, soybean prices in the Chinese province of Heilongjiang maintained an upward trend, due to the influence of rain and snow (which made it difficult to increase the supply of soybeans at the grassroots levels and caused a rise in transportation costs) and to the improvement of the demand for this commodity. Soybean prices continued to be strong this week in the United States, too, due to the slowdown in production and to the dry weather in South America.
Madagascar’s government has recently set a minimum export price of USD 250 per kilogram of vanilla (about 50% above the actual market value), which could encourage importers to source this product from other countries, such as Papua New Guinea, Indonesia or Uganda. Madagascar is expected to produce around 1800 tons of vanilla in 2020, while Indonesia and Papua New Guinea are likely to produce respectively 300 and 250 tons.
Following a significant reduction in the prices of sugar and wheat, the prices of different varieties of rice have also witnessed a 20% drop in Pakistan, mainly due to the appreciation of the country’s currency and to the reduction in international demand (which is likely to remain stagnant in the next few months). Furthermore, rice prices may have decreased also due to the low export prices of Indian rice.
Today’s media coverage highlights three measures taken by governments, companies and researchers in the English-speaking world to tackle food insecurity and food waste: in the United Kingdom, the researchers of the University of York have developed a new variety of wheat that can improve the production of the grain by up to 12%; in Canada, a materials and technology provider has created a low power consumption and low cost display that can be integrated in food packages to enable real-time monitoring of food, thus reducing food waste; the government of Massachusetts has announced that it will grant around USD 4.7 million to tackle food insecurity prompted by the global pandemic in the state.
The global production of wheat is currently not able to meet the increasing global food demand, because the rate of yield increase has been slowing and is now less than 1% per year. However, researchers at the University of York have recently created a modified variety of wheat with an improved amount of the protein that controls growth rates in plants, that can increase wheat production by up to 12%.
A Canadian materials and technology provider has developed a dynamic kind of expiry date labels for food packages, which enable real-time quality monitoring of food, in an attempt to reduce food waste significantly by detecting spoiled food in time. These labels consist in a display that is integrated into packaging, which can be used instead of the static expiry date estimations on the packages.
As part of the Food Security Infrastructure Grant Program, the Governor of Massachusetts has announced over USD 4.7 million in grants to address food insecurity in the state as a result of the coronavirus pandemic. The grant financing will be used to expand the availability of agricultural products to low income families and to facilitate the development of small-scale vegetable farms operated by immigrant and refugee farmers through the Flats Mentor Farm program.
In December, the United States will start sourcing grapes from Chile and Peru, which are both expecting above-average yields of the fruit this year (to the point that the South American harvests could result in an oversupply situation next year). Meanwhile, in Europe, a group of fruit and vegetable producers have signed a landmark position paper in the form of a joint letter, through which they agreed to adopt a common position on the European Commission’s Farm to Fork Strategy, thus committing to make European food systems fair, healthy and environmentally friendly.
Since California’s grape harvest season is nearing its end, the United States will soon begin its transition into Chilean and Peruvian supplies, which are both expecting high levels of production this year, because they have not had any negative impact from weather events. Since Peru and Chile are expected to see their grape yields increase by respectively by 20% and 10% to 15%, the South American harvests this year could result in a situation of oversupply in the first quarter of 2021.
More than 1500 fruit and vegetable producers in Europe have committed to the European Commission’s Farm to Fork Strategy (a policy that represents a central part of the European Green Deal), thus pledging to protect the environment, address climate change and ensure that the food they supply is both safe and sustainable. Over the past decades, these producers have already reduced the use of pesticides and ramped up environmentally friendly practices.