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The World is Facing Increasing Food Shortages

By Ibeth Rivero

Ibeth contributes daily market commentary in both English and Spanish (both of which she speaks fluently) and she also manages the DailyForex mobile app to ensure that traders around the world are getting important market updates in real time.

According to the chief economist at the World Food Program Arif Husain around 265 million people could suffer from food shortages by the end of the year. Some 130 million people were already struggling with food shortages before the start of the pandemic.

Food shortages Covid19The advance of the COVID-19 epidemic has caused serious disruptions on the global food supply chains, which have begun to cause shortages of products like beef and pork in countries worldwide, including in India, the United States, and Africa.

The coronavirus health crisis has forced dozens of meat processing plants in the U.S. alone to close, as they attempt to avoid the spread of the illness among their workers. Approximately 9,400 meat workers from 167 different plants got infected, and at least 45 of them have died, which are alarming figures and somewhat justify the closure.

Farms and plant-based factories are also being immensely affected, as they don't have a way to get out their products into stores and food banks. This may force them to euthanize millions of animals and to bulldoze their crops.

In recent weeks, U.S. President Donald Trump ordered to keep meat plants opened in order to avoid beef shortages. The move was heavily criticized because many consider it would put the meat industry workers and their families at risk. In any case, it seems that Trump's order was disregarded by many meat plants, as seven of them have closed (some of them permanently) since he signed the executive order.

This has already affected private households and businesses. Around 18 percent of Wendy's restaurants (a leading fast-food chain) are out of meat and not serving meat-based items, while some grocery stores are already limiting purchases. This, added to increasing demand, has pushed meat prices up, at least for "cheaper cuts". Premium cuts prices, because of the closure of restaurants, have declined lately.

Other developed countries, especially the European ones, are having a better experience regarding their food supply. However, the situation could get worse since the Eurozone imports about half of its food. Many are already proposing to focus more on the local growing of food and to support the local producers instead of importing it, as the current system puts in risk the most vulnerable in the continent.

The expectations for the rest of the world are also not the best ones, especially for countries in the developing world. According to the chief economist at the World Food Program Arif Husain around 265 million people could suffer from food shortages by the end of the year. Some 130 million people were already struggling with food shortages before the start of the pandemic.

“We’ve never seen anything like this before,” said Husain at the end of last month, “It wasn’t a pretty picture to begin with, but this makes it truly unprecedented and uncharted territory,” he added.

This is not good news because despite the world has faced hunger crises in the past, those used to be regional and associated with specific factors, like wars, political stability, or the weather. This crisis, instead, would be global and would coincide with several underlying factors associated with the advance of the pandemic, like the disruption of the economic order, together with the pre-existing problems.

"It is a hammer blow for millions more who can only eat if they earn a wage. Lockdowns and global economic recession have already decimated their nest eggs. It only takes one more shock-like COVID-19 – to push them over the edge. We must collectively act now to mitigate the impact of this global catastrophe," explained Husain.

At the moment, the global financial markets seem not to care a lot about those facts, as they're more focused on their expectations for the reopening of the economy. However, shortages of essential food items and rising food costs, coupled with a spike in unemployment could have a direct impact on both country's individual economies and the health of their citizens.

Ibeth Rivero
About Ibeth Rivero

Ibeth contributes daily market commentary in both English and Spanish (both of which she speaks fluently) and she also manages the DailyForex mobile app to ensure that traders around the world are getting important market updates in real time.

 

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