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


NEWS DIGEST 21/7/2020

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

Palm dates at the Mumias Sugar Factory for oil extraction. FAO is working with farmers in this region training programs in date palm production
©FAO/Ami Vitale

FOOD CHAIN DISRUPTIONS

When India's defense minister virtually inaugurated a new 80 km-long road in the Himalayas that leads to the border with China in early May, the Nepali government deployed police forces, summoned the Indian ambassador in Kathmandu and proposed a constitutional amendment to extend its territorial claims over an area of about 400 sq km. This territorial dispute seems to now be stuck in a stalemate, but it has already had repercussions on Nepal's exports: right after Nepal's protests, India almost suspended its imports of refined palm oil from the country, leading Nepal to stop importing crude oil (which is no longer required, considering that India accounts for two-thirds of Nepal's trade).

The Future of Our Food Supply

Some of the changes to the food industry prompted by the coronavirus pandemic only relate to minor design adjustments (e.g. one-way lanes at grocery stores); others involve the rising popularity of delivery and its economic consequences. For example, delivery entails that customers will tend to prefer buying products quickly and efficiently, and therefore grocers may react by reducing the number of options in order to make the purchases easier. Furthermore, the distinction between food retail and food service will be less clear: for instance, small grocers are already selling prepared meals for families in many cases.

Link

Nepal's refiners struggle as India stops refined palm oil imports

Edible palm oil refiners in Nepal had been thriving thanks to a preferential access to India's huge market until May 2020, when the latter suspended 39 palm oil import licences from neighbouring nations, including Nepal. This was due to a territorial dispute between the two countries, which emerged when India inaugurated a new road in the Himalayas that leads to the border with China. Therefore, there is an overabundance of refined palm oil in Nepal (around 70,000 tons), and the country had to drastically reduce its crude oil imports (from 21,000 tons in early 2020, to 7000 in June).

Link

 

IMPACT ON COMMODITIES AND FOOD PRICES

China is likely to import more pork from the USA, due to the African swine fever, and therefore the demand for palm oil (which is used to produce animal feed) may grow as well; on the other hand, the country's banana production in the southern provinces of Hainan, Guangdong and Guangxi decreased by 30%, compared to last year. In Pakistan, the inefficiency of the coordination between the provinces and of the work of Punjab's district authorities threaten to neutralize the federal government's recent efforts to counter a wheat crisis in the country.

A U.S.-China Trade Deal Could Revive Palm Oil Demand

China committed to buy USD 40 billion worth of US farm goods under the US-China Phase One trade deal. The country will probably increase its pork imports from the US, because of the African swine fever, which decimated China's pig population. If that will be the case, palm oil demand will also increase, as it is more widely used for animal feed than soybean oil, which is more expensive. In China, palm oil is normally used as cooking oil and in the production of cosmetics.    

Link

Ample bananas keep pricing low

A shrinking demand for bananas due to a seasonal shift in consumers' preferences for fruit is slowly turning its stable supply from countries like Ecuador, Honduras, Guatemala and Costa Rica into an oversupply, and caused a price decrease. The production of Chinese Hainan dwarf bananas, on the other hand, declined by 30%, due to high temperatures and a low price last year, which brought the farmers to reduce the surface area devoted to dwarf banana plantation. Normally, this fruit is grown in the southern provinces of Guangdong, Guangxi and Hainan.

Link 1 - Link 2

 
Wheat prices soar to new records in Punjab

Wheat prices in Punjab's open market have grown considerably, and recently got to PKR 2300 for 40 kg. Despite Pakistan's federal government's efforts to fulfil the domestic requirements of wheat and flour, a lack of coordination between the country's sub-national authorities has contributed to the increase in prices: for example, the ban on wheat transportation to Punjab by Sindh government is still active, and the recent wheat crisis in the country was blamed on the poor performance of the district administrations, which were assigned a leading role in flour and wheat matters by the Punjab Food Department.   

Link

COUNTRIES' RESPONSE

Germany is one of the largest humanitarian donors in the world (also with regard to the coronavirus pandemic), and this record has been recently strengthened with the pledge to make available an additional EUR 150 million to meet the need for humanitarian assistance in countries like Myanmar, Bangladesh, Iraq, Venezuela and the Central African Republic. Canada's inward financial support, on the other hand, has been recently directed toward agri-food processors, food distributors and agri-food industry organizations, while the Institute for Economic Affairs in Ghana is calling for fiscal and monetary policy reforms.

The fight against COVID-19: Germany makes available an additional 150 million euro for humanitarian assistance

Germany is making available EUR 150 million (in addition to the EUR 450 million the country funded to fight Covid-19) to meet the need for humanitarian assistance in connection with the coronavirus pandemic. These funds will support the production of face masks in a refugee camp in Iraq, a rapid response to food price increases and supply chain bottlenecks in Myanmar and in the Central African Republic, and coronavirus information campaigns in Bangladesh and Venezuela.

Link

Canadian government announces new measures to help agriculture sector mitigate the spread of COVID-19

Canada's federal government and the provincial government of Manitoba announced the new CAD 3 million Canadian Agricultural Partnership Programme to support projects that will assist agricultural processors in facing the impact of the coronavirus pandemic on their activities. More in particular, the programme will provide financial assistance for the purchase of personal protective equipment and sanitation supplies, training and resources to support Covid-19 mitigation and materials needed to adapt the production processes to meet social distancing requirements.

Link

Key Policy Initiatives for Ghana's Post-Covid19 Recovery

Ghana's Institute of Economic Affairs proposed a number of policy initiatives that are necessary to achieve post-Covid-19 recovery, including one that would tackle tax losses (which experts estimate to be around 10-12% of the country's GDP), which constitute a substantial flaw in Ghana's revenue mobilisation because the country loses about as much tax revenue as it collects, and one that prompts Bank of Ghana (the country's central bank) to support the implementation of agricultural value chain development programmes.

REGIONAL FOCUS

The deep-rooted problems underpinning protracted hunger in Southern Africa (such as poverty, inequality, HIV, and climate change phenomena) were aggravated by the coronavirus pandemic, that further damaged the food chain and caused many people in the region to lose their jobs (also in sectors that are not related to food, such as mining) and the possibility to send remittances back home. The World Food Programme scaled up its support in the region in order to build up resilience to future shocks.

AFRICA - WFP Southern Africa COVID-19 Response

The coronavirus pandemic has aggravated the effects of underlying issues in Southern Africa, such as poverty, inequality, malnutrition, recurring drought and frequent flooding. Incomes have diminished significantly, along with remittances that are vital for millions in Zimbabwe, Malawi, Mozambique and Lesotho. WFP is assisting both the traditionally vulnerable (subsistence farming families, refugees and IDPs, for example) and millions of new destitute people in the urban areas, by setting up a regional staging centre in South Africa for aid cargo and personnel, and by procuring up to three months of food to meet the increased needs.

Link

AFRICA - SADC MPs want value from vast resources

The Southern African Development Community (a regional economic community comprising 16 Southern African states) recently held its Parliamentary Forum's Standing Committee on Food, Agriculture and Natural Resources. The committee came to the conclusion that the restrictions imposed by the coronavirus pandemic resulted in loss of jobs for millions of people in the mining sector (Southern Africa is the richest continent on Earth in terms of extractive resources), and therefore also agreed on the need to find solutions for the future of employment in the mining sector post-Covid-19.

Link

EUROPE - La UE logra un acuerdo historico para frenar la crisis de la Covid-19

After four days of negotiations, the President of the European Council, Charles Michel, announced that the European leaders have agreed to create a EUR 750 billion recovery fund to rebuild the EU economies, damaged by the coronavirus pandemic. The agreement reached focuses on helping businesses rebound from the pandemic, developing new measures to reform economies over the long period, and investing to build up resilience against future crises.

Link



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