The COVID-19 pandemic introduced unexpected stresses on food systems, creating many immediate challenges. Yet what is remarkable is the speed with which supply chain actors have to date been able to reorganise themselves to ensure the continued availability of food, at least in the developed world. Some bottlenecks remain, and some new disruptions may emerge as COVID-19 continues to spread. The rapid response of food supply chains has underscored the importance of an open and predictable international trading environment, which allows firms to tap into new sources of supply when existing sources are compromised.
COVID 19 and Shipment
The impact of COVID-19 on these ( air, sea, lands) transport modes varies considerably. Bulk shipments have not seen any major disruptions, and prices for bulk freight are actually near multi-year lows. However, air freight has been severely disrupted.
The disruption is caused by the steep decline in passenger air travel, which normally accounts for the majority of air cargo capacity.
Transport and logistics problems have thus been most pronounced for perishable high-value products, such as fruits and vegetables. The fruits and vegetables sector is also affected by quarantine measures and delays in border inspections (including as the number of import/export inspectors has fall. By contrast, cereal supplies have not faced major disruptions: bulk transport has been less affected, and cereals can be loaded, shipped and handled with minimal labour input.
COVID 19 & Closing Restaurants
COVID-19 has led to a drastic shift in consumer demand away from restaurants, food service and other types of “food away from home” towards food consumed at home, requiring important changes in the way food supply chains operate. As the COVID-19 pandemic gathered pace, sales of food away from home (consumed in hotels, restaurants, catering and cafés) collapsed. Restaurant reservations declined sharply in early March and fell to practically zero as lockdowns were enforced.
The Impact of closing Resturants
Closing restaurants at large scale will work as snow ball effect on supply chain. The disturbing other demand from the retail will surely jeopardize food production.
Many supply contracts collapsed and impacted supply chain actors. Farmers , traders stopped to open credits and started to ask for advanced payment.
Supplying food was maintained by high liquidity agribusinesses. Small agribusinesses are quitting the market.
Asking for advanced payments and absence of trust has started to freeze the supply chain. Through my work in EFRESCO we started to notice that many organizations are not able to full their quality and financial payment terms.
Moreover, it becomes more difficult to source products such as Soybean, Ginger, Garlic, Onion, and wheat and other products at competitive prices.
Global Strategy and the New World Order
e-FRESCO forecast to the new global strategy is to shift the centre of agriculture production from USA and Europe to Middle East.
Moreover, food automation will become a necessity to overcome any food prone diseases. We expect that after air prone pandemic their will be a wave of food prone pandemic due to different reasons including the absence of budgets to secure food safety and the downgrading of the quality of food.
With technology advancement it becomes more feasible to implement blockchain for traceability of food and for electronic payment solutions.
Pegging Currency to Agrarian Produce!
The global transformation in addition to any unexpected global struggle will impose a great threat to food supply chain. This will encourage key players to automate food supply chain and to peg currency with food. We beleive that food is the best asset to be pegged against electronic currencies to secure a stable community.
Ammar alshami MSC CMSE PMP
M.Sc. Economics and Agribusiness