In the very fertile area of Satara in the West Indies, the farmers feed their cattle with iceberg lettuce and strawberries. You only have the choice of feeding your crop to animals or composting. Grapes are destroyed by truck.
The farmers cannot bring their products to the consumers because India has also ordered a standstill in public life. The measures fear that the destruction of agricultural products will lead to bottlenecks and drive up prices.
All over the world, millions of workers cannot go to the fields to harvest or plant. There are far too few truck drivers who take away the harvest. Even air freight for the transport of fruit and other fresh fruit is only possible to a limited extent, since there is a ban on take-off and landing almost everywhere. There is also a bottleneck with containers because there was a long ban on transportation in China.
In the US state of Florida, watermelons and blueberries spoil because harvest workers from Mexico are not allowed to enter the country. The same applies to African and Eastern European workers in Europe. All of this illustrates how the pandemic problems seem to cut off the world's supply system.The distribution of staple foods such as wheat and rice is nowhere near as hard hit, even if there are now more and more problems.
Economists in the United Nations Food and Agricultural Organization (FAO) state that poorer countries with a high population density will have the greatest problems with the consequences of the Corona crisis. In India, the country with the second largest population worldwide, the majority of people are directly or indirectly dependent on agriculture.
Prime Minister Narendra Modi ordered a 21-day lockdown on March 25. 120 million migrant workers have no money for food and do not come home. The grain belt in the north of the subcontinent lacks workers.
Delivery problems in one part of the world can quickly be felt in other places. Canada imports a lot of vegetables from India (onions, okra and eggplant). Only 20% have arrived in Canada in two weeks because the air cargo sector has stopped working. What is not delivered now spoils.
Italy will need around 200,000 seasonal workers to harvest fruit and vegetables over the next few months. A similar situation in France.Brazil lacks truck drivers, spare parts for harvesters and equipment for working on the farms. In Argentina, the world's largest exporter of soybean meal, authorities are hampering the handling of imports and exports due to the corona virus.
In addition to truck loads, there are also problems with the transport of fresh fruit over longer distances. Importers in Europe and the US state of Miami are waiting in vain for papayas and other exotic fruits from Brazil. Deliveries from there have decreased by 80%.
Exporters in Canada and the USA are experiencing the bottleneck in refrigerated containers that do not come back from China. If you order four containers you get one. Pork and beef that China has ordered is jamming in the ports because the workers have been asked to stay at home. As African swine fever prevails in China, 50% of their own pork production has broken down there and one is urgently dependent on imports. This crisis differs significantly from the food crises in 2007-08 and 2010-12 when drought drove up grain prices. At the time, this led to political unrest in many parts of the world.Government price increases had accelerated the price hike. However, the world's grain supply is currently relatively large and world market prices have been low for years because the surplus regions of the USA, Brazil and the Black Sea countries were able to massively increase their yields. Even though there are now hamster purchases in some countries in North Africa and the Arab region, there are also suppliers who want to increase their exports. For example, Thailand, who want to do more with fixed rice prices. However, India and Vietnam have now stopped their travel exports.
African countries, where people have to spend up to 50% of their income on food, are among the hardest hit by the cut in food supplies. The continent now imports 35% of all rice and 30% of all wheat available on the world market. Countries hoard little grain compared to their consumption because governments lack the money and there is limited storage space.
While earlier food crises were caused by a supply deficit, the problem today is to transport the rich supply to consumers who have suddenly lost their income. If you have no work, no transport capacity, you have no money to buy groceries.
Source
Hansa Terminhandel GmbH
