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


NEWS DIGEST 8/7/2020

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

A FAO semployee checks wheat seed to be given to Syrian farmers
©FAO/Sheam Kaheel

FOOD CHAIN DISRUPTIONS

COVID-19 determined unprecedented consequences on the global food value chain, with heavy repercussions also in developed countries, such as Canada and the United States. Already during the early phases of the pandemic, US food manufacturers recorded disruptions, and more than a half of them had to implement different changes in operations to counteract the containment measures and balance losses. Most of the companies are now focusing on digitalization, improved sanitation measures and on a communication that highlights the value of homegrown products; however, many consumers in the country are now facing food security issues, as the pandemic caused job losses and a general decrease in incomes.

Millions of Americans going hungry as pandemic erodes incomes and destroys communities

The COVID-19 pandemic determined a series of ripple effects leading to increased food prices, job losses and decreased incomes. Food security issues are starting to emerge also in developed countries, such as Canada and the United States, and people who had never thought about this eventuality are now feeling food insecure. To support this statement, the Northwestern University's Institute for Policy Studies completed a study which demonstrates that the pandemic almost doubled food insecurity in the US. The analysis also highlights how African American and Latino households are more vulnerable to food insecurity.

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The Future of Food Manufacturing and Consumer Preferences Following COVID-19

US food manufacturers have experienced serious issues connected to the coronavirus pandemic: a survey released by the National Association of Manufacturers underlines that 35.5% of manufacturers faced supply chain disruptions already in March. In order to balance the losses and counteract the negative consequences of the containment measures to stop the spread of COVID-19, food manufacturers will focus on digitalization (which allows companies to run business remotely and with a limited workforce), on enhanced sanitation methods and on a targeted communication with the consumers, prioritizing homegrown foods.

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IMPACT ON COMMODITIES AND FOOD PRICES

Australia and Pakistan are respectively short on rice and wheat supplies. While rice represents only a little part of Australia's agriculture industry, and future decisions on its cultivation will depend on water availability and on the consumers' preferences, wheat shortages in Pakistan may determine another flour crisis in the country. In Lebanon, the political unrest caused by unemployment and corruption in the public sector now merged with the consequences of the coronavirus pandemic on the economy of the country, determining a great depreciation of the Lebanese pound and vertical food price increases in grocery stores and supermarkets.

Lebanon economic crisis: Food prices are so high not even shops can afford them

The instability of the Lebanese pound, caused by a set of different factors (including political unrest and the consequences of the coronavirus pandemic on the economy of the country), is causing vertical price hikes in Lebanon's grocery stores. In less than a year, the country's currency has lost over 80% of its original value, and is takes now around 6000 Lebanese pounds to buy one US dollar. The World Food Programme recorded an increase of 50% in the price of the basket of eight basic food commodities (including rice, salt, sugar and sunflower oil), and around 163,000 households in Lebanon are living below the food poverty line.

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Drought spurs Australia to import rice or risk empty shelves

Australian rice planting and output have decreased by more than 90% since 2017, and its national yield this year is expected to be the second smallest output on record, determining a shortage of local rice supplies by the end of 2020. Rice supplies were already threatened by panic buying in supermarkets during the most acute phase of the coronavirus pandemic; furthermore, as mentioned, Vietnam, Cambodia and Myanmar stopped its rice exports in April. In the future, if water availability is not sufficient in the country, Australia will have to increase its rice imports.

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Another flour crisis in the making

Pakistan may be heading towards another flour crisis, due to a lack of proper planning and a missing wheat procurement from the western provinces of Balochistan and Khyber Pakhtunkhwa. In order to prevent the effects of the potential crisis, the Economic Coordination Committee (a federal institution) asked the province of Punjab to release 900,000 tons of wheat, and allowed the private sector to import the commodity without limits.

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COUNTRIES' RESPONSE

While Tunisia prioritized its fishing industry when establishing a coronavirus recovery plan containing different measures to mitigate the impact of COVID-19 on the country's economy, the government of Argentina focused on detecting new trade opportunities worldwide for its beef, wheat, maize, soy, pulses and poultry exporters. In Tanzania, the African Development Bank's MIVARF project (rolled out in the country between 2012 and 2017) is finally paying off, as smallholders' and traders' incomes have increased, and they are managing to decrease the percentages of food loss and waste.

El Gobierno detectó 62 mercados abiertos a los alimentos argentinos por la crisis del Covid-19

The government of Argentina detected various opportunities for the country's agricultural exporters, which have recently arisen due to the fact that different countries are lowering the barriers to trade, as their need for essential commodities is growing. More in particular, the ministry of foreign affairs, international trade and worship presented a study of 242 opportunities in 62 different markets, mainly concerning trade in beef, wheat, maize, powdered milk, soy, pulses, poultry and citrus fruit.

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Tanzania: African Development Bank Project Tripled Incomes Of Rural Producers And Traders

The Market Infrastructure, Value Addition and Rural Finance project implemented by the African Development Bank in Tanzania determined improved incomes for 78% of its beneficiaries, rising from an average of USD 41 to USD 133. Furthermore, many smallholders and traders have managed to cut their post-harvest losses, thanks to a wider and easier access to agricultural markets, and to improve their yields: for example, one specific beneficiary that produces milk recorded an 85% spike in production thanks to the establishment of a cold room.

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Agriculture et securite alimentaire: Un plan d'action en reponse a la crise Covid-19

The coronavirus pandemic exposed the weaknesses and inequalities within Tunisia's health system and food industry. In order to mitigate COVID-19's impact on the national economy, the government of the country established a set of measures, including the creation of an emergency plan to maintain the level of olive oil, fish and dates exports, to meet the internal demand for grains, and to avoid the spread of the coronavirus aboard the fishing vessels.

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REGIONAL FOCUS

The coronavirus pandemic, together with the cyclical challenges that African countries face regularly (such as droughts, floods and swarms of locusts that damage the crops), underlined the urgency for the African countries to reach self-sufficiency in the production of basic food commodities like wheat and maize. Enhancing trade relationships between them is fundamental for the attainment of this objective, and that's why the government of Ghana recently recalled the importance of the African Continental Free Trade Area. Furthermore, technology also plays a significant role in this process, as accelerating digital adoption in agriculture would improve the quantity and quality of the yields.

AFRICA - Ghana government says it's ready to host AfCFTA despite COVID-19

Ghana's government urged the African countries to take advantage of the coronavirus pandemic to diversify their industries, to prioritize sustainable development and to remain resolute in their implementation of the Africa Continental Free Trade Area (AfCFTA), which the country is ready to host despite the situation. The elimination of tariffs introduced with the establishment of the free trade area is estimated to improve trade by 15-20% in the continent, and to connect around 1.3 billion people.

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AFRICA - How a global pandemic could strengthen agribusiness in Africa

In addition to the coronavirus pandemic, African countries have recently struggled with droughts, floods and desert locust swarms. All these factors highlight the need for the continent to work towards self-sufficiency in the production of basic commodities, such as wheat, maize and rice. Focusing on intra-African trade, instead of over relying on external imports, and improving the quality of agricultural production through digitalisation processes are both key to achieve such objective.

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