Coronavirus Stokes Global Food Security Concerns

As about one fifth of the global population around the world are placed under lockdowns because of the coronavirus pandemic, many countries are contemplating putting a cap on  the flow of staple foods which has raised concerns for global food security.

In almost every country that has been hit by the coronavirus pandemic, there has been panic buying of household items and staples such as rice and flour. The virus pandemic has already infected more than 470,000 people across 200 countries. The panic buying has left shelves of many supermarkets empty.

This trend of panic buying by consumers is forcing many governments to put in place restrictions on the flow of food staples to make sure that the demand for the staples from the citizens of that particular country are able to fulfilled even as the pandemic disrupts supply chains globally.

“If major exporters start keeping grains at home, it will have the buyers really worried,” said Phin Ziebell, agribusiness economist at National Australia Bank. “It is panicking and not rational, as fundamentally the world is well supplied with food.”

Concern over domestic availability has already prompted the third largest rice exporter of the world – Vietnam, to restrict sales.

“If Vietnam maintains the export ban we will suddenly have about 10-15% less available supply in the world market in the near term,” one European rice trader was quoted in the media as saying. “Africa especially could face disruption from this.”

And several logistics channels in India, the largest rice exporter of the world, have been brought to a halt as the country has just now entered a 21 day national lockdown.

While Malaysia, the number tow producer of palm oil in the world, has slowed output, restriction in sunflower seed exports has been called for by Russia’s vegetable oil union.

Following decent 2019 harvests, wheat exports have been maintained by Russia, Ukraine and Kazakhstan so far.

“I am absolutely sure there will not be a harsh scenario – like Russia leaving the market. But I think there is going to be some soft scenario,” a trader said was quoted in the media on Thursday. The trader was referring to wheat and other types of grain.

On the other hand, some of the importers are ate attempting to increase strategic supplies while others are facing hiccups in supply chains.

Delays in offloading Black Sea grain supplies from ships is being faced by Egypt, the world’s largest wheat buyer, because of slow paperwork due to the coronavirus pandemic.

“There are at least four cargoes, corn and wheat, for the private market that I know have been delayed at the ports,” Hesham Soliman, a private grain trader, was quoted in the media as saying.

Egypt’s government has however said that there are enough stocks of strategic supplies for the next four months and the shipments that have been delayed all belong to the private sector of the country.

“As of now we have not seen any wheat importer rushing to cover supplies more than the usual needs,” said one trader in Singapore at an international trading company which sells Black Sea and U.S. wheat in Asia.

(Adapted from Reuters.com)



Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: