COVID-19 and fresh produce: quick summary of impacts and paths to resilience  

//COVID-19 and fresh produce: quick summary of impacts and paths to resilience  

COVID-19 and fresh produce: quick summary of impacts and paths to resilience  

By |2020-05-13T09:32:07+00:00May 8th, 2020|

COVID-19 and fresh produce: a quick summary of impacts and paths to resilience

 The COVID-19 pandemic has plunged the world into a crisis of previously unknown magnitude, disrupting every single supply chain. Actions to restrict movements have generated important changes in consumption, trade and logistics that have lead companies to re-think their processes and systems so as to keep ensuring their business´ existence.

Fresh fruit and vegetable supply chains are on the list of the most disrupted industries. Changes in global eating habits and food logistics and distribution have impacted the global food trade, especially the first tiers of the supply chains. Farmers, exporters, distributors and logistics suppliers are struggling to keep up with a constantly changing environment.

The African agricultural sector has been affected by the pandemic as it is largely dependent on exports. It is estimated that exports from Africa to the rest of the world range from 80% to 90% of total exports, of which a huge share is made up of agricultural produce. Intra-African trade accounts just for around 2%.

The main impacts

Africa’s top trading partners for agriculture products are based in Europe, who are also facing financial strains from lockdowns which have inevitably curbed demand for some imports, turning them into less reliable trade partners for African countries.

The pandemic has caused shifting buying habits that have directly affected the trade with African countries. Consumers now prefer to buy affordable fresh fruit and vegetables with a good shelf life. For instance, healthy, vitamin-rich products and everyday consumables, such as citrus fruit, kiwis, apples and bananas, are in high demand. Anything out of the ordinary, such as expensive and exotic fruit or vegetables, has seen a decline in demand[1]. In addition, the closure of bars and restaurants has also affected the demand for exotic fruit and vegetables.

African fresh produce exporters are also affected by limited and costly transport. As airlines have cancelled their passenger flights, the airfreight capacity is scarce, limited to cargo flights, with increased (in some cases doubled) tariffs. Sea freight has been operating, although with scarce refrigerated containers available. Additionally, exporter and importer countries are reporting problems in finding enough truck drivers, with delays at borders.

Any logistical problem means products take longer to get to their destination. As reported by several African agro-exporters, delays in logistics are leading to shortages in storage capacity, more specifically cold storage capacity.

The labor shortage is the third main issue F&V exporters are facing. Limitation of movement is one of the main reasons, but also fear of infection by workers. High-value supply chains are particularly affected and these include food processing plants, which are labour-intensive. Currently, most of the sorting and packing lines do not comply with the social distancing requirements.

The route to resilience: disruptions can also bring opportunities

The crisis is also seen as an opportunity to build more resilient food systems. As quick as the effects of the pandemic have been, we have also seen quick responses that are allowing the fresh produce sector to recover and reestablish itself.

E-commerce & digital marketing: global lockdowns have forced brands to adapt to an online business model whether they were ready or not. Social media and e-commerce (online sales) is already a strategy many farmers are using to sell their produce and an easy way to create linkages between farmers and consumers.

One of the principal recommendations for making the jump into digital is to first make sure customers know you are operative and that you have pivoted your offering to online sales, local markets, value-added products etc. Social media is a good way to inform people about this and to promote company websites and pictures of your operations, highlighting standards in terms of hygiene, certifications and quality[2].

Local trade: considering how consumption has changed with lockdowns, the local demand for fresh produce has increased considerably. Agribusinesses, especially exporters, of some fresh products, have had order reductions or cancellations, forcing them to redirect products to local markets (supermarkets), or consider value-addition processing. Many supermarkets have suffered a shortage of fresh supplies, they have had to keep up with the increased demand and look for more suppliers. Local demand will increase once open markets are allowed to operate.

Interregional trade: Another way to reduce dependence on exports is to strengthen regional trade, by selling to neighbouring countries. For instance, several agro-exporters in Zimbabwe traditionally selling to UK markets, have started to sell to South African markets. Many organizations, such as World Bank and FAO, are promoting the strength of the African Continental Free Trade Area, aimed at creating a single market for goods and services, as well as promoting the movement of people across borders. As a response to the pandemic, requests have been made regarding reducing import tariffs and temporarily reducing value-added taxes, as well as other taxes, as a way to rapidly facilitate regional trade.

Farm logistics: Longer time lags in logistics are generating temporary over-stock of produce, which has meant that many farmers are lacking sufficient cold storage in order for it to arrive at the destination with good quality standards and sufficient shelf life. Many agro-exporters have reported they urgently require immediate cold storage capacity and have rented reefers, cold room space from third-party logistics (3PL) providers, and have rented out space to other farmers or whatever option was available.

Therefore, many have argued that there is a lack of cold storage service providers specifically those who can offer rental and portable cold rooms and pre-coolers, that can be placed anywhere close to production points, thus reducing the need for mobility because they are movable according to requirements or seasons.


Sources

[1] https://www.cbi.eu/news/all-hands-deck-fresh-sector-covid-19/

[2] https://www.moondustagency.com/knowledge-center/2020/4/26/food-beverage-brands-who-adapted-to-covid-19