Panic buying could lead to global food supply crisis

posted by Charlie Hart
8 April 2020

Behavioural changes as a result of the coronavirus outbreak such as panic buying could lead to a global food supply crisis, the UN has warned.

In a report the UN’s World Food Programme (WFP) found global markets for basic cereals were currently well supplied and prices generally low, but it said panic buying could drive prices up as big importers or governments “lose confidence in the reliable flow of basic food commodities”. 

Coronavirus-related containment measures such as blockages on transport routes and quarantine restrictions will also challenge food security.

“It is not a supply issue, but it is a behavioural change over food security. What if bulk buyers think they can’t get wheat or rice shipments in May or June? That is what could lead to a global food supply crisis,” said a grain market analyst at UN Food and Agriculture Organization. 

Food-price spikes could have “devastating” long-term repercussions in low-income countries, with nations in Africa and the Middle East particularly vulnerable due to their dependence on primary commodities such as fuel, ores and metals for export earnings.

The report cited the food price crisis in 2008, when global food prices spiked and the world’s poorest households suffered disproportionately.

“They tend to spend the largest share of income on food, but typically don’t have savings or access to credit. Rising food prices, thus, often resulted in an increase in the depth of poverty rather than pushing more people into poverty,” it said. 

Coronavirus is also likely to impact global food production, the report added.

“Countries with forthcoming key agricultural seasons – for example in the Horn of Africa, Central America and Caribbean, Western Africa and parts of Asia – may be affected by reduced agricultural labour due to containment, or lack of access to agricultural inputs due to supply chain disruptions,” it said. 

Disruption on transport routes will be a particular concern for fresh produce and could impede farmers’ access to markets. 

The majority of the world’s 212m people who are chronically food insecure and the 95m who live amidst acute food insecurity are in Africa, the report added.

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