Some of the most common consequences of the global coronavirus pandemic on food value chains included excess in food stocks, staffing shortages, changes in market demand and disruptions to the supply routes, which forced many farmers to dump their produce, such as eggs, milk and vegetables, which were left to rot. Furthermore, the pandemic caused many changes to shopping habits: for example, more and more people in Canada are less concerned with the environmental repercussions of single-use plastics, and the country’s government has temporarily put aside its plans to reduce their consumption. In South Africa, the wine businesses owned by people of color are still struggling and demand support from the government.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
Canadian consumers’ attitudes have changed during the coronavirus pandemic: according to a new study on plastic food packaging, while the number of Canadians that avoid plastic packaging has remained more or less the same, fewer people are now concerned with the environmental repercussions of their shopping habits, mainly because they associate safety to takeout and home delivery. Furthermore, the use of single-use plastics has grown by between 250% and 300%, and the government’s plans to ban single-use plastics have been postponed.
In South Africa, a group of women-owned wine businesses are criticizing the government for not being supportive of black-owned wine businesses and wine industry transformation during the coronavirus pandemic. More in particular, the businesses were trying to raise awareness on the daily challenges that the black-owned businesses encounter in the wine industry, mostly generated from the fact that, since they are first-time-rounders, they do not own any generational wealth. Therefore, the group demanded access to infrastructure, production facilities and land to grow their own grapes.
Some of the issues determined by the coronavirus pandemic on the food supply chains affected many countries at the same time, without distinction. For example, since many coffee shops were forced to shut down, a side-effect of the pandemic was the oversupply of milk (that’s why gallons of milk were dumped due to the disrupted supply routes). Furthermore, excess in stock and changes in market demand brought farmers to dump eggs and let crops decompose because of a lack of facilities to store them and the difficulty in redistributing it. Finally, staffing shortages, changes in shopping habits and unused food stocks were three other commonly spread disruptions.
IMPACT ON COMMODITIES AND FOOD PRICES
Because of the extremely dry weather and severe spring frosts during the last harvest season, the production volumes for wheat and maize in the European Union are modest, and so are exports (which decreased by 47%, compared with last year). Wheat prices remain stable, while maize prices are projected to increase in the next few months. In Bangladesh, despite the Bangladesh Rice Research Institute’s positive estimations about the production of rice and grains in the country, rice prices are soaring. This pushed the Ministry of Food to coordinate with field offices, which were instructed to assess the country’s food stocks by liaising with traders and millers.
European farmers are hardly selling grains, because there is sufficient storage space available (harvest volumes this year have been below average), so there is no immediate need to sell. Therefore, wheat exports were considerably lower than last year (only 1.9 million tons of wheat have been exported; down 47% year-on-year). For what concerns prices, they are generally not very high for wheat, while maize prices will increase as analysts have adjusted the expected maize harvest in Europe downwards by 2.6 million tons to 64.6 million tons.
Bangladesh’s Ministry of Food has taken steps to assess the stocks of grains in the country, prompted by the soaring prices of rice that took the authorities by surprise, because the government had announced that since production during the last season was significant, there would not be any shortages (according to the Bangladesh Rice Research Institute’s estimations). More in particular, it entrusted the Directorate General of Food to ask all field offices to visit millers and traders and send reports on the stock of paddy, rice, wheat and flour within 5 days.
Both India and the United Kingdom are focusing on digitalization to drive agricultural development and achieve higher productivity and food quality. More in particular, they are both implementing strategies that have internet of things technologies at their core, thanks to which data can be gathered more efficiently. Furthermore, indoor farming environments will benefit from new building automation systems in the UK, which improve the monitoring of specific factors such as lighting, ventilation and humidity. In Pakistan, a long-lasting wheat shortage could be solved by following the recommendations that the Competition Commission of Pakistan included in a policy note, instead of importing wheat.
Pakistan is still short of 1.5 million tons of wheat, but according to the Competition Commission of Pakistan (an independent agency of the government that enforces economic competition laws in Pakistan) this situation can be overcome without importing additional supplies, by withdrawing from wheat flour mills the permission to extract 65% of flour and 35% of bran and other products from wheat: this would determine the immediate availability of 1.5 million tons of wheat flour. Furthermore, the Competition Commission recommended the government to stop fixing minimum wheat support price, which allegedly creates circular debt in the food sector.
India’s current leadership envisioned a USD 5 trillion economy: in order to achieve this objective, agriculture development is paramount. Backed by government’s initiatives, agriculture start-ups are developing innovative, tech-friendly solutions: for example, cloud computing could be used by farmers for crop management via software-as-a-service applications, and new platforms are being developed to enhance data collection. Furthermore, internet of things technologies will connect different devices across the country in order to provide data-based insights, and the monitoring processes will be streamlined through the use of smartphones and tablets.
Indoor farming and food processing plants in the UK are transitioning to implement industrial internet of things devices and building automation systems to ensure that crops grow with the maximum efficiency. Such new technologies allow them to monitor temperature, ventilation, humidity levels, lighting and the concentration of specific gases in order to improve food quality and safety as much as possible. All these factors can be managed automatically where controlled-environment agriculture is needed (mushroom farms and vertical farming, for example), thanks to building automation systems.
During the first seven months of the current year, the European Union has become the first destination of banana exports from Ecuador, which have increased by 8.09% thanks to an increase in demand from different markets around the world. Meanwhile, different countries in East and Southern Africa have been severely affected by the coronavirus pandemic, which reduced the access to food and compromised the agricultural production. A solution to these disruptions may be represented by an enhanced regional integration, which would determine the establishment of common public policy responses.
Food production was seriously compromised in Africa because of the coronavirus pandemic, and incomes have been lost; however, a far more devastating welfare consequence of the global pandemic could be reduced access to food. The integration of regional economies represents one way to alleviate the food security issues in the continent, but it cannot be achieved without sufficient data on food prices and the appropriate support for investment in production, infrastructure and capabilities. What is needed to achieve this objective is a more integrated agricultural system with coordinated public policy responses that include also small and medium-sized farmers.
During the first seven months of 2020, banana exports from Ecuador have increased by 8.09%, totalling 230.32 million boxes, thanks to an increase in exportable supply and an increase in demand from different markets. According to the Banana Marketing and Export Association, the European Union was the main destination for the fruit, with 28% of the total shipments, while sales to the United States, East Asia and Oceania all decreased.