Global food security concerns are mounting as some governments contemplate restricting the flow of staple foods with around a fifth of the world’s population under lockdown to fight the widening coronavirus pandemic.
Panic buying of household items and store cupboard staples such as rice and flour has occurred in nearly every country hit by the virus, which has infected over 470,000 people across 200 countries. Empty shelves in supermarkets have been common.
The erratic nature of consumer buying is stoking concern that some governments are moving to stem the flow of food staples to ensure their own populations have enough while supply chains are disrupted by the pandemic.
“If major exporters start keeping grains at home, it will have the buyers really worried,” said Phin Ziebell, agribusiness economist at National Australia Bank. “It is panicking and not rational, as fundamentally the world is well supplied with food.”
Vietnam, the third largest rice exporter, has already restricted sales amid concerns over domestic availability.
“If Vietnam maintains the export ban we will suddenly have about 10-15% less available supply in the world market in the near term,” one European rice trader said. “Africa especially could face disruption from this.”
India, the top global rice exporter, has just entered a three-week lockdown that has brought several logistics channels to a halt.
Elsewhere, Russia’s vegetable oil union has called for a restriction in sunflower seed exports, and palm oil output has slowed in the number two producer Malaysia.
WHEAT MARKET ON EDGE
Russia, Ukraine and Kazakhstan have so far been able to maintain wheat exports after decent 2019 harvests, but Russia-focused grain traders are nervous.
“I am absolutely sure there will not be a harsh scenario – like Russia leaving the market. But I think there is going to be some soft scenario,” a trader said on Thursday, referring to wheat and other types of grain.
At the same time, some importers are trying to boost strategic supplies while others are finding glitches in supply chains.
In Egypt, the world’s largest wheat buyer, there have been delays in offloading Black Sea grain supplies from ships, with paperwork slowed by office closures due to the virus.
“There are at least four cargoes, corn and wheat, for the private market that I know have been delayed at the ports,” Hesham Soliman, a private grain trader, said.
The cargos are all for the private sector and Egypt’s government has said it is well stocked with strategic supplies for four months ahead.
Iraq has said it needs to import 1 million tonnes of wheat and 250,000 tonnes of rice after a “crisis committee” advised building up strategic food stocks, while Qatar is also signing agreements to increase its reserves.
However, most wheat buyers in Asia, led by the world’s second largest importer Indonesia, are covered for supplies until June, traders said.
“As of now we have not seen any wheat importer rushing to cover supplies more than the usual needs,” said one trader in Singapore at an international trading company which sells Black Sea and U.S. wheat in Asia.