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


NEWS DIGEST 27/7/2020

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

FAO matching grant beneficiary Fayzali Vorisov inside his lemon cold storage.
©FAO/Nozim Kalandarov

FOOD CHAIN DISRUPTIONS

The frailties of the global food supply have been widely exposed by the coronavirus pandemic, and there is the need to reinforce it by focusing on strengthening the countries' commitment to sustainable practices, to fund technological innovation, and to restructure their agriculture economy (one lead could be represented by Canada, which already embodies most of these traits). Although they were not dramatically hampered by the trade restrictions caused by the coronavirus pandemic, maize exports from Argentina will be negatively impacted by a decreased demand for biofuel, while the US Congress is urging the government to reduce food losses and waste in the country.

The future of the global food supply is in jeopardy, but Canada can lead the way in change

The coronavirus pandemic greatly hampered the global hospitality and restaurant sector, causing a considerable decline is demand for different food crops, and posed challenges to the agricultural production, exposing the frailty of the global food supply. Feeding the world' growing population over the next decades will require an increase in food production, which could drive deforestation. Canada could set an example to curb this trend, with its blend of technological innovation, great commitment to sustainable practices and solid agriculture economy.

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Does the US government's food waste reduction plan pass the sniff test?

The US Congress' Select Committee on the Climate Crisis has recently called on the government to reduce the nation's food waste footprint, which amounts to a total value of around USD 161 billion, endorsing an interagency initiative launched in 2015 by the US Department of Agriculture and the Environmental Protection Agency, which aims at reducing the US' food waste by 50% by 2030, thanks to an enhanced consumer education and incentivized food waste reduction in schools and grocery stores.

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Exportación. Un camino empinado para recorrer

The maize value chain in Argentina, which faced the second largest harvest in the history of the country, came out almost unscathed from the early phases of the coronavirus pandemic. However, what is coming does not depend on the maize industry's ability to respond flexibly and effectively to unforeseen events, but is rather related to a decrease in global trade by between 13% to 32%, and to a fall in the demand for oil which determines a consequent decrease in the production of biofuel (maize is the predominant raw material for the production of bioethanol).

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IMPACT ON COMMODITIES AND FOOD PRICES

Despite the enhanced wheat imports imposed by the federal government, Pakistan is still struggling with a flour shortage that is mainly due to a lack of cooperation between sub-national authorities. The Northern province of Khyber Pakhtunkhwa, which is one of the most hit by the shortage, asked the federal government to redirect parts of the new wheat imports and purchased additional supplies of wheat. In India, the back-to-back lockdowns are causing food prices to rise in markets, and the growing number of new infections is causing a labour shortage at the Kakinada port, hampering rice exports.

The Khyber Pakhtunkhwa province in Pakistan contacts center for wheat import amid flour shortages

Parts of Pakistan are still facing a wheat and flour shortage: the authorities of the Northern province of Khyber Pakhtunkhwa are currently trying to put an end to the shortage by liaising with the federal government and the Pakistan Agricultural Storage and Services Corporation (a government agency that is responsible for the storage of agricultural products from the whole country) in order to redirect wheat imports or to purchase additional supplies. In the meantime, the provincial government will release wheat from the reserves on a daily basis.

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Prices shoot up as Sunday markets return to business with depleted stocks in Kolkata

Between the end of the last lockdown and the start of another in Kolkata, most of the grocery shops remained closed due to supply shortages, while vendors in markets are selling old stock at an increased price, including tomatoes, which were sold at INR 100 a kilo (compared to 60 INR a kilo on 20th July and INR 80 a kilo on 22nd July). This is due to the effects of the staggered lockdown on the city, which has affected the movement of truckloads of fruits and vegetables during the weekend.

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Indian rice exports slow as coronavirus disrupts supply chain trade

Due to a labour shortage caused by more than a thousand new coronavirus infections in the Southern state of Andhra Pradesh, India's rice exporters are struggling to fulfil orders. In the next months, this could result in 100,000 tons of rice not being exported per month, as a labour shortage also implies a decreased production from rice mills, which will be operating at lower capacity. India is the world's largest rice exporter, and the fact that shipments are being slowed down could benefit rivals like Thailand and Vietnam and could also increase global rice prices.

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COUNTRIES' RESPONSE

In Sub-Saharan Africa, Nigeria's Osun state will fix the recent food chain disruptions by providing new seedlings and technical assistance to farmers, and by rehabilitating the state's country production in collaboration with the Cocoa Research Institute of Nigeria, while Rwanda recently received a loan from the African Development Bank, which will be used to strengthen the country's health system and to build up economic resilience to future shocks. In Sri Lanka, the government's support to exporters efficiently mitigated the effects of the coronavirus pandemic on their activities.

Sri Lankan exports rebound due to gov't policies

Sri Lankan exports have recovered from the coronavirus-induced shocks in June, thanks to the government's efforts to contain the spread of the pandemic while at the same time maintaining free trade zones and export processing facilities operating. The result of this is that tea, rubber and coconut exports have recently increased, and the state organization for export promotion is liaising with Sri Lanka's Board of Investment in order to further diversify the country's exports in the future.

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Rwanda: African Development Bank commits $98 million for multisector COVID-19 response

The African Development Bank has recently approved a new concessional loan of around USD 98 million to Rwanda, which will support the strengthening of the country's national budget in order to mitigate the impacts of the coronavirus pandemic. For example, most of the funds will be used to reinforce Rwanda's health system (through bolstering infection prevention and laboratory capacity for testing) and economic resilience, and to mitigate the impact of the pandemic on the most vulnerable people in the country.

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Governor Oyetola is deliberate about revitalizing the agriculture value chain

The Commissioner for Agriculture and Food Security in the South-Western state of Osun, Nigeria, recently stated that the state government is committed to both increase food production and security in the short term, and to revitalize the agriculture value chain in the long term. The state government is planning to reach these goals by distributing more seedlings to farmers, by rehabilitating the state's cocoa production, and by improving technical assistance and capacity development for farmers.

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REGIONAL FOCUS

China's growing demand for pork and fruit (especially bananas) will benefit large exporters (such as the European Union countries' pork exporters) and emerging exporters (Cambodian banana exporters and the Central Asian fruit exporters) during the rest of the year. Countries like Kyrgyzstan, Tajikistan and Uzbekistan would particularly benefit from increased exports to China, which would enhance their economic growth and generate employment (horticulture requires at least twice as much labour as cereal crops).

ASIA - How fruit can boost economic development in Central Asia

Kyrgyzstan, Tajikistan and Uzbekistan currently realize only about one third of their full export potential in cherries, grapes, apricots and plums. Increasing Central Asian fruit exports could generate employment, increase income and boost economic growth in the rural areas. China is the perfect target for such exports, because its consumers continue to change their dietary preferences to include more protein, fruit and vegetables, contributing to a growth in fruit import demand.

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ASIA - China allows more import of yellow bananas from Cambodia

Cambodian banana exports to China are projected to double during 2020, as the Chinese Customs Administration recently decided to grant five Cambodian companies the official rights to export bananas to the Chinese market (bringing the total number of such Cambodian companies to 15). As a result of this, investment in banana crops are likely to increase in Cambodia, in order to enable the country to meet China's growing demand for the fruit.

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EUROPE - EU pork production up in 2020

With confinement measures progressively lifted all over the European Union, market forecasts for the EU 27 member states predict that the meat production will increase for pork (+0.5%), but the African swine fever still poses a concrete risk, in addition to the uncertainties relate to the coronavirus pandemic. Furthermore, EU meat exports are projected to increase during the rest of the year (with the exception of poultry), especially to China.

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