FAO’s Big Data tool on food chains
under the COVID-19 pandemic


NEWS DIGEST 29/6/2020

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

Locust swarms
©FAO/Luis Tato

FOOD CHAIN DISRUPTIONS

Two US Senators highlight the underlying causes behind the difficulties faced by the US meat industry, which relate to its consolidation by four major meat producers. The coronavirus pandemic may aggravate the current situation, leading to higher retail prices, and to a strengthened industry centralization that will stifle the small independent producers. Meanwhile, the locust swarms that started devouring crops in East Africa in early 2020 have recently entered Nepal to breed, threatening the country's food security.

How has the risk profile of UK farmers been impacted by COVID-19?

The coronavirus pandemic determined three major consequences on the UK's food supply chain: the demand of food products from restaurants and hotels plummeted, while it has grown considerably from supermarkets; many businesses in the food sector adapted to the shift in demand by switching production lines and focusing more on direct delivery to the consumers; some farms are facing the issues posed by the closure of borders, such as a general labour shortage and the accumulation of surpluses, which weighs on the storage facilities.

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After fall armyworm and Covid-19, locust invasion new threat to Nepal food security

The swarms of desert locusts (the most dangerous migratory pest species in the world, according to FAO) that began damaging crops in the Horn of Africa in early 2020 have been moving towards the Middle East and Southwest Asia. Eventually, they reached Nepal, whose food security is threatened by three different factors: the after-fall armyworm, the COVID-19 pandemic, and now the swarms of locusts. If the current weather conditions don't change, there is the possibility that Nepal's vegetable crops will be heavily damaged.

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Threat of meat shortages is growing. Senate needs to act now

The coronavirus pandemic has clearly brought the US meat industry to a turning point. As mentioned, four major companies in the United States carry out around 80% of the country's meat processing activities and use their weight to purchase livestock at lower prices, while raising them when selling processed meat. The pandemic only made such a situation clear, and if the market will not stabilize in the near future, most of the small cattle producers will be absorbed by the consolidated industry.

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IMPACT ON COMMODITIES AND FOOD PRICES

Since COVID-19 raised food security concerns in North Africa and in the Middle East, some of the countries in those regions have to rely more on wheat imports to enlarge their reserves, in view of a possible worsening of the current situation. Their increased demand may interfere with the interests of Southeast Asia's buyers, which also have to face a lower wheat production. This could represent a good possibility for Australia to reinvigorate its wheat exports, by making the best out of its competitive advantages (represented, for instance, by the low freight rates with the Southeast Asian countries due to a short distance between them). Ecuador's banana exports, on the other hand, despite having continued steadily during the pandemic, are hampered by a decreased production.

El flujo del dinero está terrible para el sector bananero

Despite the fact that banana exporters increased the workers' wages in order to have them to keep coming to work every day, the president of Ecuador's Banana Exporters Association claims that, because of the coronavirus pandemic, it was difficult to contain work absenteeism. This, in turn, had a negative effect on the quality of the products.

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Ray of hope for Australian new crop wheat exports to Southeast Asia in 2020-21 marketing year

Despite being Australia's largest wheat importer, Indonesia went from purchasing 4 million tons of milling wheat a year in 2017, to less than 1 million tons in 2019. However, there are two specific factors that may revitalize Australia's wheat exports to Southeast Asia in the following years: more competitive freight rates, if compared with exports from other countries, and the cumulative effect of drought and the coronavirus pandemic, which determined a wheat supply gap that could be filled by Australia.

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Meat prices rise in Maine as grocers seek to stabilize supply chains

As mentioned before, the closures of various meat processing plants around the US, caused by the COVID-19 outbreaks among the workers, determined a sharp increase in meat prices. One of the methods that were put in place by US grocers and supermarket chains in order to make up for the disruptions of their supply chains caused by the coronavirus pandemic is increasing their stocks of goods, but also reducing the variety of products they offer, in order to concentrate efforts on their mainstream goods.

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COUNTRIES' RESPONSE

A common approach in tackling the hassles raised by the coronavirus pandemic on food security is focusing on rural development in three different countries: the government of Ghana's National Development Planning Commission is developing a policy on genetically modified organisms in order to improve crops productivity; Bangladesh's government committed to help all farmers in the country by providing incentives for irrigation and seeds and to boost farm mechanisation; the Philippines' Department of Agriculture chose to avoid additional rice imports in order to support productivity-enhancing development activities in agriculture.  

NDPC is developing a policy document on GMOs

Ghana's National Development Planning Commission, which is part of the Executive, is developing a policy on genetically modified organisms that will play an important role in the country's agricultural sector modernisation. The director of the NDPC also noted that agricultural actors in Ghana should apply a demand-driven, rather than a supply-focused approach; meaning that farmers should be free to choose the volumes and types of the different crops they grow, instead of following the government's instructions.

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Agriculture in the spotlight in Covid-hit Bangladesh

Despite the disastrous consequences of the coronavirus pandemic, the agricultural sector in Bangladesh is still playing a fundamental role for the country, providing employment to around 40% of the total labour force. For this reason, the government recently prioritized this sector, by focusing on mechanisation development and by providing subsidies and incentives for the farmers, for both traditional and non-traditional crops (like coffee, cashew nut and dragon fruit).

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Department of Agriculture of Republic of Philippines: DA welcomes DTI's decision to drop PITC rice import plan

The Philippines' Department of Agriculture denied the recommendation to import 300,000 tons of rice, which was made by the Philippine International Trading Corporation as Vietnam suspended its rice export while making sure it complied with the new requirements amid the coronavirus pandemic. This will provide the country with PHP 8.5 billion savings, which will be reinvested in agricultural development operations that will enhance productivity and ensure food security.

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REGIONAL FOCUS

Markets in Latin America are among the major hotbeds for coronavirus: for instance, the Mercado Las Pulgas in Maracaibo, Venezuela, was the source of one of the biggest outbreaks in the country, resulting in 400 cases and around 12 deaths. That is mainly due to two reasons: most of the market sellers refused to close up shop because they don't receive any kind of financial support from the government, while, in turn, most of the consumers can only afford to buy food products in markets, where prices are generally lower.

How will tourism in LMICs change post-COVID?

The UN World Tourism Organization's growth forecasts for international tourism in 2020 (3% to 4%) had to be completely revised with the impact of the coronavirus pandemic. Tourism is a strategic sector in Rwanda, as it is at the core of the country's modernization process, just like in other LMICs. The main difference between the tourism sectors in high-income countries and in LMICs is that generally the latter lack financial support to assist the tourism businesses until tourists will be able to travel freely again.

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ASIA - Food companies in Asia rethink supply chains broken by pandemic

Since the beginning of the coronavirus pandemic, various food companies in Asia found it difficult to obtain the same quantities of ingredients and materials, and to transport the finished products. For example, a famous Chinese pork producer closed five production plants in the United States, and in April, Vietnam and Cambodia both suspended their rice exports, while Myanmar applied similar restrictions until recently.

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AMERICA - Los emblemáticos mercados de alimentos en el continente se han convertido en el epicentro de los brotes

The biggest wholesale market in Mexico City is the source of dozens of new COVID-19 cases each week, and a similar situation was detected in different food markets in Venezuela and Peru. Closing them is off the table in many cases, as they constitute a fundamental source of income for farmers, and the only place where the consumers can afford to purchase food products. This is the reason why Peru holds more than 2600 food markets.

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Contacts: FAO Datalab (ESS-datalab@fao.org)