Several countries in South and Southeast Asia are currently experiencing difficulties along different stages of the food supply chain. Vietnam and the Philippines, for example, share issues related to the import and export of food products: while the most productive region in Vietnam (the Mekong Delta, also called the “Rice Bowl” of Vietnam) lacks satellite systems, food safety inspection units, qualified irradiation facilities and proper logistics centres (which would all contribute to the decrease in logistics costs for the export of fruits such as the dragon fruit), the Philippines’ government for years has not managed to provide its people with sufficient sugar supplies due to inaccurate demand predictions. India, on the other hand, is facing its worst COVID-19 outbreak since the start of the pandemic, just like Cambodia (where many people living in the “red zones” are facing difficulties in sourcing sufficient quantities of food), and this could surprisingly benefit Nepali tea farmers, thanks to an increased demand for tea leaves.
Selected weekly news on food chain disruptions and countries responses to the COVID-19 impact on food chains (26/04/2021 to 02/05/2021)
FOOD CHAIN DISRUPTIONS
Despite contributing about 90% of rice production, 65% of aquatic products and 70% of fruit production for Vietnam’s exports, the Mekong Delta region lacks key logistics centres and food safety inspection units, which has repercussions on the country’s exports: for example, the logistics costs for Vietnamese dragon fruit exports to the US and the EU accounts for more than 30% of the total production cost. Cambodia, on the other hand, is currently facing the worst COVID-19 outbreak since the pandemic began, and despite the government’s promise to supply food to the “red zones” (those with high rates of coronavirus cases), hundreds of people do not have enough to eat. Finally, the Philippines is currently unable to secure a sufficient supply of sugar as a result of the Sugar Regulatory Administration’s inaccurate demand predictions.
China is still enforcing strict measures to limit food and beverage imports from Australia, especially after the Australian government cancelled the agreements between the state of Victoria and China related to the Belt and Road Initiative: for example, the long inspections of imported Australian fruits are causing delays at ports, and new tariffs have been imposed on wine imports. More in particular, Chinese importers are currently reducing the proportion of Australian grapes, while increasing imports from other countries (such as New Zealand and Thailand), and the grapes are also experiencing lengthy delays at Chinese ports. As regards Australian wine exports to China, on the other hand, they have collapsed to almost nothing from December to March, and Australian winemakers have registered a 96% drop in the value of their exports to China.
According to the Nepali tea farmers, the winter drought in the country (which started in December 2020 and lasted Until February 2021) has led to poor plant health, and the result was that harvest for the first flush had almost halved compared to normal volumes. The first flush corresponds to the first plucking of a tea plant’s harvest season and yields the purest and freshest cups of tea, so it is the most important one throughout the year. However, according to some traders, the latest catastrophic COVID-19 outbreak in India (which is the second-largest tea producer in the world, after China) may trigger a massive increase in demand for tea both in India and in other countries, including Nepal. Furthermore, the tea factories have already fixed the price of green tea leaves this year.
IMPACT ON COMMODITIES AND FOOD PRICES
The Ramadan celebrations, and the consequent increase in demand for food products, has caused food price fluctuations in most of the countries with large Muslim populations: for example, the prices of perishable goods in Nigeria has increased during the first week of celebrations, while food prices mostly remained stable in Morocco, and in some cases they actually decreased. Meanwhile, the worldwide unfavourable weather conditions (dry and cold) for the production of grains are affecting production volumes and prices, especially in Europe, Northern Africa and Brazil. Finally, Thailand’s food exports are expected to grow in the coming months, especially thanks to the increasing import demand for durian and mangosteen in China (whose export volume has reached 575,000 tons last year), that has driven prices up.
A sudden increase in customers demand in Nigeria for specific food products, which corresponds to the Ramadan celebrations, brought about an increase in food prices, and especially for perishable goods: fruits and vegetables such as peppers, bananas, oranges, pineapples, apples, berries and grapes, but also beans, garri (flour made from the roots of the cassava plant) and ogbono (or African mango). After one week from the start of the holy month of Ramadan in Morocco, on the other hand, the prices of the food products that are most consumed by Moroccan households continue to show stability or even decline for some categories, compared to the same period last year. This was thanks to the regular supply guaranteed by national markets, which were able to satisfy the sharp increase in demand during the celebrations, and also to carry out the necessary controls to counter any fraudulent practice or price manipulation.
Due to the recent dry and cold weather, wheat prices in the United Kingdom have reached their highest in ten years. Prices are also being affected by similar weather conditions in other parts of the world, such as the United States and the other European countries, and for other commodities: for example, barley production in France is expected to see a large decline from the two previous seasons, just like the production of rapeseed (whose planted area in France is at its lowest since 1997). Finally, maize prices have also risen to their highest since 2013, due to the concerns for Brazil’s maize crops that are caused by drought, and to the very dry soils in Canada, where planting is about to start. China is still supporting the global maize and wheat prices, and its maize demand is also expected to increase in 2021-22 by 5.5 million tons.
The increasing import demand for Thai durian and mangosteen in China is driving up their prices and their import value in the Chinese market, which has reached USD 2.3 billion (that correspond to around 575,000 tons) last year, and now nearly 90% of the Thai export volume of these fruits is destined for the Chinese market. In response to a growing production volume this year, Thailand’s Ministry of Agriculture has set up a dedicated team that will implement and oversee the measures taken to prevent the spread of COVID-19 in the durian industry. Furthermore, as vaccinations against COVID-19 continue in the country, the value of Thai food exports is expected to increase by 5.7% this year to THB 1 trillion; this, in turn, is likely to benefit the country’s farmers.
The GML project (Governance of Multifunctional Landscapes) was funded by the European Union and will be coordinated by CIFOR in Cameroon, Zambia and Kenya over the next four years. Its implementation has already begun in Cameroon, where 100,000 fast-growing and edible fruit trees will be planted in the Centre region in order to restore degraded landscapes and to contribute effectively to the sustainable management of wood energy value chains (with the ultimate goal of improving people’s livelihoods). Meanwhile, the Philippines is both trying to reduce food loss and waste by passing a bill that would require food businesses to donate their excess food, and to enhance its food exports by pushing the Australian government to grant market access for Filipino Cavendish bananas and withdraw the anti-dumping measure on canned pineapples. Finally, the Venezuelan government will undertake to provide farmers and livestock producers with new diesel supplies, which are currently scarce in the country due to international sanctions.
One of the members of the Philippines’ Senate has recently filed a bill (the Food Waste Reduction Act) with the objective of encouraging collaboration between the government and the private sector in fighting moderate hunger (namely, experiencing hunger only once, or a few times during the last three months), which has become more widespread due to the several repercussions of the coronavirus pandemic. More in particular, the Food Waste Reduction Act would require food businesses to donate their edible excess food to food banks and charities, and to recycle their inedible food surplus into fertilizer. For what concerns food exports, on the other hand, the country’s government has also urged Australia to grant market access for Filipino Cavendish bananas, and to lift the anti-dumping measure that was imposed on the Philippines’ canned pineapples.
Venezuela’s agriculture has gone back to ox ploughing in recent times, due to the shortage of diesel that was caused by international sanctions, chronic smuggling and giveaway pump prices: diesel is essential for food production, as it is used in tractors, harvesters, seeders, irrigation motor pumps, electric generators and trucks (90% of Venezuela’s farm machinery is currently grounded for lack of diesel, according to the Ministry of Agriculture). Due to the consequent loss of crops and difficulties in producing meat, milk and eggs, Venezuelan agricultural producers are currently warning of an imminent collapse in the agri-food system. For this reason, Venezuela’s oil minister and agriculture minister have recently undertaken to ensure up to 30,000 barrels per day of low-sulphur diesel to farmers and livestock producers within two months.
The Centre for International Forestry Research (CIFOR) has recently launched an initiative (“Governance of multifunctional landscapes in sub-Saharan Africa: managing trade-offs between social and ecological impacts”) that aims at reducing environmental damage in the wood energy value chain, which is a significant factor of deforestation in sub-Saharan Africa. More in particular, the Lékié division in the Centre region of Cameroon will benefit from a reforestation campaign of 100,000 fruit trees: the Centre region was chosen for this campaign as more than 60% of the households use wood as their main source of energy for cooking, and this trend is expected to increase over the next decades (due to the growing demand for charcoal in urban centres). 70% of the trees will be fast-growing species for wood energy, while the remaining 30% will be made up of edible fruit species.
A joint body of the Organisation of Islamic Cooperation that is focused on alleviating hunger in the organisation’s member states has launched a series of strategic programs whose aim is boosting food availability and accessibility for specific commodities (wheat, cassava, rice and palm oil), and establishing entities that are capable of maintaining connections between agricultural businesses and coordinating national food stock policies and national food reserves. Meanwhile, Ghana is carrying out its 10-year cashew industry development plan, which includes several initiatives: the latest one is the launch of a Master Training Programme on Cashew Value Chain for seven African countries, whose objective is to promote the competitiveness of the continent’s cashew industry. Finally, after China’s ban on Taiwanese imported pineapples, Taiwan’s pineapple farmers have experienced an excess of pineapples, and therefore huge price falls that caused them major economic losses.
The Islamic Organization for Food Security (which operates as a joint body of the Organisation of Islamic Cooperation since 2016) will implement 16 strategic programs with the objective of boosting food availability and accessibility while championing supply stability in its members countries, most of which are vulnerable due to natural disasters (such as droughts and locust invasions) and political instability. The main programs will focus on the development of strategic commodities (such as wheat, cassava, rice and palm oil), the establishment of the Islamic Food Processing Association (whose main aim is creating solid connections between agricultural businesses in the IOFS member states), the elaboration of a regional mechanism for the Food Security Reserve and the creation of a Grain Fund.
The Regional Minister of the Bono Region, in Ghana, has recently opened a new edition of the Master Training Programme on Cashew Value Chain for seven African countries, that include Ghana, Benin, Mali, Sierra Leone, Togo, Burkina Faso and Ivory Coast. The aim of the Training Programme is to provide theoretical knowledge and practical skills in order to promote the competitiveness of the African cashew industry. This is part of Ghana’s 10-year development plan to leverage the potential that cashew production represents for the country’s economic development: part of this development plan was also the creation of policies that will promote the diversification of tree crops, and the establishment of the Tree Crop Development Authority that will regulate the sector.
On February 26, the Chinese General Administration of Customs issued a ban on pineapples coming from Taiwan starting from March 1, citing the risk of harmful pests that could have affected China’s crops. In response, Taiwan (according to which the aim of China’s ban was ramping up political pressure on the island) began seeking out new customers overseas. For the time being, however, pineapple growers in the Chinese mainland are witnessing thriving businesses, while Taiwanese farmers are experiencing a glut of pineapples (Taiwan produces 420,000 tons of pineapples annually, and last year exported 10% of them to China), which caused drastic price drops and consequent economic losses for the farmers.