Global food glut sows seeds of doubt for farmers

Linda J. Dodson

That creates pinch points: Pacific ports for North American grain exports; New Orleans for soy and corn. 50pc of Brazil’s exports move through the port of Santos; 75pc of Argentina’s grain, meal and oil export occurs in a small area near Rosario in the south of the country.

The problems of labour and supply chain bottlenecks are combined in Malaysia and Indonesia – home to 90pc of the world’s export production of palm oil, used in all kinds of foods from crisps to ice cream.

The fruit of oil palms is perishable and labour intensive to collect. “Clearly Covid can shut that down,” says Vogel. “Sabah, a state which produces 25pc of Malaysia’s palm oil, has already shut down the palm oil industry.” It is now slowly reopening.

Still, such sticky logistics can usually be surmounted through the application of the best lubricant: money. The market, says Vogel, is “fairly efficient” at turning to alternative routes if usual ports or trade routes are slowed or shut by Covid. “An extra $10 or $20 transport per ton, which is a lot in transport, should see delivery to a working port or inland.”

That is reassuring, because it is not just India which has seen bumper harvests. So too has South America and South Africa, the latter of which has seen its second best summer season on record after a break in recent droughts. It expects to be able to supply most of sub-Saharan Africa as a result, and has already restarted citrus exports to Europe.

South Africa’s lockdown began four weeks ago and paralysed ports, interrupting the start of the citrus export season, but regulations have since been eased: “We are just about fully back on track now,” said Mitchell Brooke, logistics development manager, from the Citrus Growers Association of Southern Africa.

One container vessel, the Santa Barbara, slipped anchor from the Port of Durban on Wednesday, laden with a consignment of lemons and another, the MSC Sophia Celeste, is currently steaming at 18kts off the coast of Namibia, laden with wine and satsumas for the 18-day trip to London Gateway, within the Port of London.

There is, undoubtedly, an abundance of food in the world, notably the staples.

“If you look at the basics of rice, of wheat, which are basically the key food grains, we have enough,” says Vogel. “There is more production in the year 2019-20, right now, than demand. And the outlook for next year is that production will again exceed the demand.”

That’s before you get to “inventories”, or giant stockpiles, around the world. No country in the developed world is panicking yet, though several developing nations, such as Egypt, are estocking, says Basse.

“We’re not going to starve,” says Mintert. But like life, supply chains will not go back to normal without a prevention or a cure for the disease. Fruit pickers, even if allowed to return, will presumably not be allowed to pile into crammed lodgings and Nissen huts near fields; meat packers used to standing elbow to elbow on the de-boning line will not be as productive if they social distance.

Whilst vast quantities of basic grains can be harvested, trucked and shipped by tiny numbers of people (“There’s barely a safer place in my mind right now than farming wheat in the middle of the United States,” says Vogel), meat and fruit and veg cannot.

Instant imports, via airfreight, have made a mockery of seasons, allowing fresh products to be flown in around the year. “We eliminate seasonality through imports from countries with different growing seasons,” says Basse. “There will be retraction there.” Prices will go up, and ranges of fresh goods in aisles will probably be reduced, if only because importers are not sure which transporters will make it through the separate crisis in aviation.

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