GLOBAL FOOD SYSTEM STAYS FIRM DESPITE PANDEMIC

The global food system continues to function well despite the ravages of the global COVID-19 pandemic, The Economic Briefing says, largely because of the efficient logistics, the higher harvests of crops and improved meat production, as well as rationalized consumption patterns.

However, 80% of the planet’s 8-billion people are fed with imports and they spent $1.5 trillion for food, which is thrice the bill they paid in 2000, indicating that rather be reduced, food prices are rising even as the globalized market claims to be super-efficient.

“But the biggest problem lies not in the system’s bottlenecks. It lies in the effects on consumers of almost a billion incomes reduced or lost. The United Nations (UN) estimates that the economic fallout from COVID-19 could see the number of people suffering from acute hunger double to 265 million over the course of this year. Developed countries are not immune. In America, queues at food banks in some cities stretch for kilometers. In these circumstances even quite small dislocations in the food system could, by increasing prices further, lead to great suffering,” The Economic Briefing said.

Sunny Verghese of Olam, the world’s second-largest rice trader, says only four or five countries grow more rice than they eat. That is why Vietnam’s recent restrictions on exports sent the price up sharply. And export controls prompt buyers to stockpile, igniting a vicious circle. In the past 20 years the industry has seen increased concentration of ownership as firms chase the advantages of scale. Half of America’s poultry market—the largest in the world—is now controlled by just four firms. Two of the six largest mergers in the 2010s were between companies in food and drink. Emerging markets, where changing diets and urbanization create fresh demand, have spawned giants of their own. Brazil’s JBS is the largest meat-processing company in the world. China’s largest food manufacturer, COFCO, has gobbled up a bevy of established traders as it keeps the grain flowing to Beijing. #COVID19