Wednesday, March 25, 2020

Article: "Countries are starting to hoard food, threatening global trade"

Companies are already struggling with bottlenecks because of the shutdown of manufacturing in China. The Epoch Times reports that:
      U.S. businesses are grappling with supply chain disruptions from plant closures in China because of the CCP virus pandemic.

      Although most Chinese factories are back in operation, delays in moving goods have exacerbated the supply crisis for companies that are heavily dependent on goods and parts from China.

      For a majority of U.S. businesses, lead times between the placement of order and delivery have doubled, according to a survey by the Institute for Supply Management, conducted Feb. 22 to March 5 among more than 600 U.S. companies.
I've also noted several instances where countries have clamped down on allowing the export of medical goods and pharmaceuticals (e.g., Germany and India). But Bloomberg now notes that some food exporting nations are restricting the export of food stuffs. From the article:
Kazakhstan, one of the world’s biggest shippers of wheat flour, banned exports of that product along with others, including carrots, sugar and potatoes. Serbia has stopped the flow of its sunflower oil and other goods. Russia is leaving the door open to shipment bans and said it’s assessing the situation weekly.
The article also observes, on the other hand, that countries that are net food importers are pledging to buy up more food for reserves or reducing import tariffs for food (e.g., China, Turkey, Algeria and Morocco). The article continues:
      For some commodities, a handful of countries, or even fewer, make up the bulk of exportable supplies. Disruptions to those shipments would have major global ramifications. Take, for example, Russia, which has emerged as the world’s top wheat exporter and a key supplier to North Africa.

     “If governments are not working collectively and cooperatively to ensure there is a global supply, if they’re just putting their nations first, you can end up in a situation where things get worse,” said Benton of Chatham House.

      He warned that frenzied shopping coupled with protectionist policies could eventually lead to higher food prices -- a cycle that could end up perpetuating itself.

      “If you’re panic buying on the market for next year’s harvest, then prices will go up, and as prices go up, policy makers will panic more,” he said.

      And higher grocery bills can have major ramifications. Bread costs have a long history of kick-starting unrest and political instability. During the food price spikes of 2011 and 2008, there were food riots in more than 30 nations across Africa, Asia and the Middle East.

     “Without the food supply, societies just totally break,” Benton said.
The United States is a net exporter of food, but the food still has to be distributed internally, with much of it transported over our highways via truck. Thus, Reuters caught my attention with the headline, "On the road through a pandemic, some truckers fear for their lives." It's not theft or hijacking that is the worry, though, but truckers afraid of catching the Wuhan virus.

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