Food supply chain to be given ‘specific focus’ for economy regrowth as lockdowns in region relaxed

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Various countries within the APAC region appear to be moving towards relaxing COVID-19 related lockdowns and restrictions this month. In line with this, ministers within the APEC regional forum have urged that food and agriculture product supply chains and trade with regional collaboration despite any remaining emergency measures.

The APEC regional forum comprises of all APAC countries, Canada, the United States, Mexico, Russia, Peru, and Chile.

“While halting the spread of COVID-19 currently remains the top priority of every economy, remedying the economic challenges must also be accorded a specific focus,”​ said the APEC Ministers Responsible for Trade in a statement after concluding a sectoral meeting.

In this regard, we will work to facilitate the flow of essential goods and services [including agriculture] and food products and other supplies across borders, minimise disruptions to the global supply chains [and] ensure that trading links remain open [as well as] resolve any unnecessary barriers to trade.”

The forum highlighted the impact of COVID-19 on ‘vulnerable developing communities’​ particularly with regard to the current economic slowdown, urging all countries to ensure any emergency measures taken to combat this be ‘temporary’​ and ‘not create unnecessary barriers to trade’​.

“Returning workers to employment should be a high priority for all economies,”​ said the ministers. No mention was made about specific measures to balance this priority with ensuring that safety and social distancing measures necessary to stop COVID-19 spread are observed.

Nevertheless, this statement is unsurprising given that earlier numbers from APEC had estimated a US$2.1tn loss in output this year due to COVID-19, leading to predictions that the region’s growth will drop by 2.7% in 2020, a complete reversal from the 3.6% growth recorded in 2019.

This would be the largest single drop seen since the 2009 global financial crisis, which saw a near-zero growth rate.

“The APEC region is on the frontlines for meeting this challenge because member economies are among the first and worst affected by the pandemic,”​ said APEC Secretariat Executive Director, Dr Rebecca Sta Maria.

“The focus now is for members to come together for coordinated multilateral cooperation to support our people and small businesses.”

APAC COVID-19 major F&B industry updates

China

As the first epicentre of the virus outbreak worldwide, China has become the first to emerge from a full nationwide lockdown and move into ‘recovery mode’.

Because of this, China has become a go-to for observation of what F&B trends are likely to emerge ‘post-COVID’, even if the outbreak is not fully over in the country yet.

Major observations so far have included a shift in online purchasing patterns towards food items for home cooking​, driven by higher consumer awareness of healthy eating.

“The COVID-19 epidemic is quickly revolutionising how consumers from Chinese mainland think about their health, as well as changing their purchase behaviour and the channels they are using to shop,”​​ Nielsen China President Justin Sargent told us.

“In-home eating experiences have been reset – even after life returns to normal post COVID-19, [Chinese consumers] are emerging with more of a ‘homebody’ mindset.”

Online purchasing of fresh foods in general is also expected to rise as a result, and this change is likely to be a permanent one with many new consumers having discovered the boons of e-grocery shopping during the crisis. Various fresh food platforms in China have seen massive growth in the numbers of daily users.

India

India has separated the country into red, orange and green zones according to COVID-19 conditions. Many restrictions have been relaxed in green zones, which have not seen any incidence in 21 days.

This is despite national infection numbers having crossed 74,000 mark as of May 13, and daily new infection numbers that have been rising by the thousands.

One of these relaxations was that for alcohol shops, which were previously ordered to close during the nationwide lockdown. This resulted in long queues outside shops as Indians rushed to buy alcohol in many cities, leading to fears of potential new clusters forming.

In red zones such as Mumbai and New Delhi, F&B is still considered an essential service and allowed to operate accordingly, but a Food Industry Asia (FIA) report indicates that the industry is facing massive manpower challenges.

“[These challenges] include the interpretation of legislation by the enforcement officials on the ground, logistics issues due to the timing, inter and intra state movement restrictions, and the availability of labour due to the migration of workforce,”​ said the report.

“These concerns have led to the manufacturing plants not being able to operate at full capacity.”

Malaysia

Malaysia attempted to relax restrictions under its Movement Control Order (MCO) on May 4, but saw opposition from seven of its 14 state governments, which refused to implement the national government’s orders for fear of inciting a new wave of COVID-19 infections. [to add link when live]

Amongst these states were major food manufacturing hub Selangor and agricultural produce hubs Kedah and Pahang – meaning that refusal by these states to lift MCO controls would still hinder smooth food supply chain operations.

Healthcare experts in the country have urged against this too, saying that the country is not yet ready and that more COVID-19 phases are likely to come, which would be worsened by prematurely lifting the restrictions.

That said, the F&B industry in Malaysia has urged all states to concurrently resume operations to prevent this.

“[We] are sure [this timely move by the Government] has been based on very sound data and considerations,”​ said Federation of Malaysian Manufacturers (FMM) President Tan Sri Dato’ Soh Thian Lai.

“It is important that business operations in all states resume concurrently as there are inter-linkages between states. [Stopping] work in certain states will lead to major disruptions in the supply chain of goods and services and, at the same time, also impact the livelihood of the rakyat (people).

As of May 12, Kedah is leaning towards reversing its earlier decision and complying with the national government, Sabah has loosened its stance somewhat to allow certain sectors to reopen, whereas Selangor’s reigning sultan (king) has attempted to supersede the local government’s decision to ‘rebel’. Pahang has partially acceded, allowing only ‘green zones’ (areas free from COVID-19) to move to CMCO.

The other states have maintained their positions.

Indonesia

Indonesia is also facing a difficult decision in weighing healthcare versus economy, as it becomes increasingly clear that the country looks to be at severe risk of food shortage if its lockdown continues for a prolonged period.

Although the authorities have repeatedly reassured Indonesians that there is sufficient food supply, with new COVID-19 case numbers remaining stubbornly in the hundreds daily and climate change predicted to hit crops hard, fears are that continued lockdowns will end in many people starving instead.

In a televised conference, Agriculture Minister Syahrul Yasin Limpo told locals that: “From our national food balance, we actually have a pretty good balance that is well-controlled and quite available.

“Stocks are safe until the fasting month and Eid al-Fitr. We have validated the data with [all] regions.”

But this has contrasted directly with data announced by President Joko Widodo showing that shortages of key commodities have reportedly surfaced most of Indonesia’s provinces – Over 20 provinces are short of garlic, sugar, chili and chicken eggs, whereas rice, which is a staple food in Indonesia, is short in seven provinces.

Indonesia resumed all public transportation services including trains, buses, planes and ships on May 7 in an attempt to allow steady food transportation and wage workers to get to work, amongst others.

Philippines

The Philippines believes that it has succeeded in ‘flattening the curve’ with daily new cases generally staying below the 300 mark, but President Rodrigo Duterte has opted to play it safe by keeping lockdowns in place on Manila and parts of Luzon island.

In April, Department of Agriculture Secretary William Dar announced that the country has enough rice stock to support demand until March 2021 in an attempt to put an end ‘once and for all’ to persistent rumours about Philippines’ food stocks running low.

“We would like to inform the public that based on our estimates, the country will enjoy an ending rice inventory of 3.27 million metric tons (MMT) by December 31 this year. That means we will have rice to feed the entire country for 94 more days or three months, up to March 2021,”​ Dar announced.

“This will settle once and for all the misconceptions espoused by uninformed quarters on the rice supply outlook, as the DA’s estimate is based on the official data of the Philippine Statistics Authority, and validated on the ground by the DA’s regional field offices.”

Duterte has pleaded with Filipinos to remain patient and comply with restrictions, saying: “There is no telling how long COVID-19 will remain in our lives. [We’re] just waiting for the right time. Just be patient, please.”

However, social conditions amongst the country’s poor have not reflected the government’s optimism, with many facing starvation and even deeper poverty, so there is no telling how long it will be before Duterte’s pleas for ‘patience’ are buried by hunger.

Thailand

Thailand also began easing lockdown restrictions on May 3, after reporting less than 10 new daily COVID-19 cases on average for a week, with one of the major regulations lifted being the ban against alcohol retail in most provinces in the country.

This resulted in many people rushing to panic-buy alcohol​ supplies with no regard for social distancing measures earlier this month, leading to widespread online condemnation that this might lead to a fresh round of COVID-19 infections.

The ban remains in place in several provinces including Nakhon Phanom and Rayong (until May 15), Chanthaburi, Pathum Thani, Phetchaburi, Phitsanulok, Sa Kaeo and Songkhla (until May 31), as well as Buri Ram and Lampang (indefinite ban until governors deem it safe).

Vietnam

Vietnam lifted lockdowns in various cities in April, citing a low number of new cases reported daily, but also announced that measures would continue to be put in place to protect the community.

Health experts continue to doubt the real number of community cases in Vietnam that have been detected due to the low numbers of tests that have been administered.

Vietnam has also moved to resume its rice exports from May, which were previously limited to 500,000 tonnes in April – though according to industry leaders, the damage has already been done.

“The temporary suspension in the past one month has nonetheless resulted in market loss for the local traders as new contracts were held back due to the export limit,”​ said FIA.

“With the lifting of the rice export limit, it is [now] necessary to speed up the clearance of existing rice stocks at ports and minimise storage costs.”

According to LMT Online​, at least 300,000 tons of rice – slowly degrading through the month of export bans – were stuck at ports due to the ban.

Singapore

Singapore has extended its lockdown (originally set to end by May 4) by an extra month to extend into June, due to a second wave of COVID-19 infections that hit the country through its dormitory-residing migrant worker population – a wave that shot its case numbers up into the tens of thousands.

Nonetheless, some measures have been eased as of May 5, and will proceed in a phased manner. For food retail, May 12 was when most F&B outlets considered non-essential such as confectionery shops, packaged snacks, cakes, and desserts restarted operations for takeaways and delivery services. 

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