Developing countries boost global food trade amidst COVID-19 – FAO

Global trade in food products has proven remarkably resilient during the COVID-19 pandemic with developing countries even managing to increase export revenue, the Food and Agriculture Organisation of the United Nations (FAO) has said.

According to the ‘FAO’s Food Outlook’ report published Thursday on the FAO website “developing countries have demonstrated notably vivacity in buoying global food trade flows.”

The FAO’s Food Outlook is a biannual publication released every May/June and November/ December focusing on developments affecting global food and feed markets.

It said, “Their (developing countries’) export earnings in the first half of 2020 rose by 4.6 per cent compared to the same period of the previous year while those of developed countries declined.

“That is partly explained by the sharpest drops occurring for beverages, fish and meat.

“The demand for which is more responsive to the declines in household incomes triggered by the contracting global economy.

“Over the same period, world imports of beverages fell by more than 12 per cent and fish products declined by more than 10 per cent while the value of trade in animal and vegetable oils and oilseeds both increased by almost 10 per cent,” the report said.

In the report, Josef Schmidhuber, the co-author with Bing Qiao, both FAO economists, said “The global food import bill for the whole of 2020 may even exceed that of 2019.

“There is, however, a noticeable shift away from high value food items to staples,” he said.

Market trends

The cereal markets in 2020/21 are well supplied with the prices affected by tightening markets for wheat and robust international demand for coarse grains and rice, the report notes.

It said global production of oilseeds and derived products in 2020/21 is expected to reach a new record over the 2020/21 seasons while growing demand points to tightening markets.

“World sugar production in 2020 is seen rebounding although below the pace of growing consumption, which will depend on whether further COVID-19 related lockdown measures are imposed.

“World milk production in 2020 is also predicted to expand buoyed by favorable monsoons and the resilience of village cooperatives’ networks in collecting milk amidst logistic hurdles in India along with government stabilization assistance in the European Union and United States of America.”

It said, “For the fisheries sector, which as noted above suffered a large drop in trade flows, production is expected to decline in 2020 due to the pandemic’s impact on demand, logistics, prices, labour and business planning.

“Capturing fishery output will likely decline slightly while aquaculture production is expected to decline for the first time in many years.”

The report notes that the pandemic’s impact on the market for fish, notably a drop in demand for fresh fish due to aversion to going to markets and restaurants has triggered “far reaching changes” likely to persist in the long term and support product innovation, shorter value chains and new distribution channels.

According to the report, the COVID-19 pandemic has rattled the value chain for tropical fruits, especially the most perishable items, which require labour-intensive handling and rapid and often airborne transport and have relatively high costs.

“Global trade in pineapples, mangos and papaya has declined sometimes at a double digit pace.

“Bananas and avocados, by contrast, have shown some resilience with both fruits posting export growth but critical strains have affected their value chains especially for smaller producers who face elevated prices of fertilisers and pesticides and have suffered from cancelled orders,” the report said.