Global food supply chain holding up for now as COVID-19 pandemic worsens

In a new report, “COVID-19: Potential impact on the world’s poorest people: A WFP analysis of the economic and food security implications of the pandemic”, the UN agency said that global markets for basic cereals are well-supplied and prices generally low.

However, it said, given the highly globalized nature of food production and supply, commodities need to move from the world’s ‘breadbaskets’ to where they are consumed – and COVID-19-related containment measures are starting to make this more challenging.

“Disruptions are so far minimal; food supply is adequate, and markets are relatively stable,” said WFP Senior Spokesperson, Elizabeth Byrs, noting that global cereal stocks are at comfortable levels and the outlook for wheat and other staple crops is positive for the rest of this year.

“But we may soon expect to see disruptions in food supply chains”, she said, explaining that if big importers lose confidence in the reliable flow of basic food commodities, panic buying could ensue, driving prices up.

‘Behavioural change’ could rock markets

Elaborating, a seasoned grain market analyst at the Food and Agriculture Organization (FAO), quoted anonymously in the report, said the problem is not supply, but “a behavioral change over food security”.

“What if bulk buyers think they can’t get wheat or rice shipments in May or June?  That is what could lead to a global food supply crisis,” the analyst said.

For low-income countries, the consequences could be devastating, with long-term repercussions, with coping strategies coming at the expense of such essential services as health and education.

It recalled that when a food price crisis struck in 2008, the world’s poorest households – which typically spend the largest share of income on food – suffered disproportionately.

Using the economic pillar of the Proteus food security index - and taking into account dependency on primary commodities such as fuel, ores and metals for export earnings - the report said that countries in Africa and the Middle East are most vulnerable.

Source: UN News