A recent report published by the WTO Secretariat on the impact of the COVID-19 pandemic on world agricultural trade shows that agricultural and food exports increased by 2.5 per cent during the first quarter of 2020 compared to the same period in 2019.
“While overall merchandise trade fell sharply in the first half of 2020, agricultural and food exports increased by 2.5 per cent during the first quarter of the year compared to the same period in 2019, with further increased in March and April. However, the crisis has exerted further downward pressure on food prices, and therefore on producer revenues”
WTO
According to the report, even though many of the initial measures were expected to impact negatively on the agricultural sector, the sector has shown resilience, with a trade performance that has fared better than other sectors.
The report however, warns that countries are still fighting the pandemic, and its repercussions for food supply chains are still unfolding. While there is currently no reason why the ongoing health crisis should turn into a food crisis, disruptions to food supply chains constitute a risk, with governments’ trade policy choices likely to determine how the situation evolves.
Portions of the report reads;
“Trade in agricultural products has been more resilient than overall trade. This reflects the essential nature of food and the resulting relative income-inelasticity of demand for it, as well as the fact that most agricultural trade (notably cereals and oilseeds) takes place in bulk marine shipments that have not been subject to major disruptions.
“While overall merchandise trade fell sharply in the first half of 2020, agricultural and food exports increased by 2.5 per cent during the first quarter of the year compared to the same period in 2019, with an increase of 3.3 per cent in March, followed by a 0.6 per cent increase in April, although the preliminary data for May indicate a small decrease (-1.3 per cent) compared to 2019.
“In April 2020, exports dropped also for several food products, notably for higher-value products, such as fresh produce, dairy and meat, which are generally more dependent on sales to restaurants, schools and the tourism sector than to households.
“According to the World Food Programme’s most recent estimates, 270 million people could be acutely food-insecure by the end of 2020, representing an 82 per cent increase from before the pandemic. Producing and storing enough food is not sufficient if it does not reach those in need. By contributing to the availability and affordability of food, trade remains a crucial part of the solution to countries’ food security concerns — particularly at a moment when people’s incomes are under pressure. It is therefore critical to keep trade flows open, and to ensure that food supply chains stay operational”.
The report further indicated that the overall impact varied across regions and whilst some regions such as Asia saw its agricultural exports decline in March 2020, Europe and North America experienced same in April. Exports however, increased in South America, driven by Asian demand for the region’s exports of products such as soybeans, sugar and meat.
