The Brazilian coffee exporters are struggling with an unavailability of containers or space in vessels to hold them, which was caused by the recent exponential growth of exports and parallel reduction of imports. The Cambodian rice farmers, on the other hand, have been recently affected by heavy rains that escalated into a tropical storm, which ravaged crops and prevented trucks from transporting supplies. This situation has already caused the death of at least 11 people, and it could get worse in the near future, as two more tropical storms are set to hit Cambodia in the next few days.
Selected daily news on food chain disruptions and countries responses to the COVID-19 impact on food chains.
FOOD CHAIN DISRUPTIONS
Due to a shortage of available containers or space in vessels, the Brazilian coffee traders are currently struggling to ship cargos out of the country. This shortage could be caused by the weakening of Brazil’s currency due to the damages to the country’s economy caused by the coronavirus pandemic: this brought exporters to increase the exports of goods that were now much cheaper, while imports were concurrently decreasing. This determined an imbalance in the availability of containers: in August, 251,000 containers were leaving Brazil, while only 172,000 were arriving.
A tropical storm has recently caused flash floods in 19 of Cambodia’s 25 provinces (including the capital, Phnom Penh), affecting a total of 140,000 people (10,000 of whom were evacuated), ravaging thousands of hectares of rice and blocking several major roads in the worst-hit provinces. Since the beginning of October, the seasonal heavy rains have caused the death of at least 11 people, and they are forecasted to continue until the next weekend, because two more tropical storms are expected to hit the country.
IMPACT ON COMMODITIES AND FOOD PRICES
The annual consumer price inflation in India increased to 7.34% in September, from 6.69% in August, while food inflation went up to 10.68% from 9.05%: this is evident from the hike in potato prices (which have more than doubled in September), and from the price increase for several other commodities, including fish, meat and vegetables. Maize prices, on the other hand, are expected to meet a sharp rise in China, due to the extreme weather events (both drought and typhoons) that have hit parts of the country and brought farmers to reduce the maize acreage in favour of soybeans.
According to India’s Ministry of Commerce and Industry, potato prices have more than doubled in September and the International Monetary Fund has recently highlighted that inflation is currently on the rise in the country, mainly due to the supply disruptions caused by the coronavirus pandemic. The prices have increased similarly for other food products during the month, including vegetables (up 20.7%), meat and fish (both up 17.6%).
China’s maize futures hit a new record high this week, because the investors are betting on higher prices for the grain, due to the fact that crops were severely damaged by typhoons this year, and that the country’s maize reserves are greatly reduced. More in particular, while typhoons have flattened the maize crops in some parts of China’s north-eastern maize belt, the output is expected to drop due to drought in the Liaoning and Jilin provinces, and many farmers have reduced the acreage for maize and increased it for soybeans in the Heilongjiang province.
Today’s media coverage highlights three interesting measures to improve productivity and traceability in specific sectors of the food industry: three US senators have advanced a bill that would improve the American seafood competitiveness by supporting the development of offshore aquaculture (according to them, the United States lags behind other countries in farmed seafood production); the Australian government will fund the creation of new jobs in the food manufacturing industry in order to speed up the recovery of the country’s economy in the aftermath of the global coronavirus pandemic; China plans to apply its traceability technology to the production and distribution of two specific varieties of rice and watermelon.
In September, three US senators introduced the Advancing the Quality and Understanding of American Aquaculture (AQUAA) Act, which complements a recent executive order on seafood competitiveness and supports the development of an offshore aquaculture industry in the United States’ federal waters. According to the initiators of this bill, the AQUAA Act would fill the regulatory gap that is holding back the US seafood production.
The Australian government has recently announced the Modern Manufacturing Strategy, which recognizes food and beverage manufacturing as one of the country’s six national manufacturing priorities. The strategy aims at creating jobs to support the economy’s recovery from the disruptions of the coronavirus pandemic, through the investment of around AUD 1.5 billion over the next four years.
China is expanding the use of its traceability technology to local varieties of watermelon and rice, as part of the government’s strategy to revitalize agriculture in rural communities through the investment of around CNY 5 billion. More in particular, this traceability technology includes the attachment of unique IDs to every product using a patented algorithm engine that produces many IDs in a short period of time. These IDs allow consumers to have access to information such as growth conditions, fertilizer used, harvest times, and so on.
Three newspaper articles with a regional focus highlight the measures taken by different regions of the world to tackle the difficulties posed by the global pandemic and by climate change: in Southeast Asia, a new railway service for the distribution of agricultural and industrial products has just started to connect the Chinese Zhejiang province to Vietnam, and will soon link China to Thailand, Cambodia, Laos and Singapore; in the MENA region, countries are boosting their agricultural imports to protect themselves from further pandemic-related disruptions; the EU plans to improve data collection for monitoring in agriculture in order to reduce methane emissions.
An international railway service for production distribution between the Chinese Zhejiang province and Southeast Asia has started its activities with the first train connecting the Yiwu county in China and Hanoi, in Vietnam. The return journey will establish a cold supply chain of Vietnamese fruit for the market in Zhejiang, while the railway service will soon connect China with markets in Thailand, Cambodia, Laos and Singapore.
Many countries in the MENA region have increased their purchases since the coronavirus pandemic upended global supply chains, in order to fill in their stocks out of fear that the pandemic will continue disrupting port operations and wreaking havoc on global trade: for example, both Egypt and Jordan have increased their wheat reserves (Egypt increased its purchases by more than 50% since April), just like Morocco and Turkey, where bad harvests added to the need to boost imports.
The European Commission has recently announced the EU strategy to reduce methane (the second biggest contributor to climate change) emissions, which is fundamental to reach the EU’s 2030 climate targets. The strategy includes legislative and non-legislative actions in the energy, agriculture and waste sectors, which together account for 95% of methane emissions worldwide. For example, the Commission will improve reporting of emissions from agriculture through better data collection.