|Hoarding is a natural human response – sometimes emotional, sometimes rational – to perceive scarcity. / Photo by Kevin McGovern via Shutterstock|
Hoarding is a natural human response – sometimes emotional, sometimes rational – to perceive scarcity. Research has found that people are more likely to engage in hoarding when their emotional or intuitive side driven by panic, fear, and anxiety believes that there is a reason to hoard. But would you believe that it is not just grocery shoppers that are hoarding food items? Some governments are also moving to secure their food supplies during the pandemic.
Kazakhstan, for instance, which is one of the biggest shippers of wheat flour in the world, has banned the exports of their product along with potatoes, sugar, and carrots. According to the Kazakhstan Grain and Feed Annual Report published by the United States Department of Agriculture, the world’s total flour exports in 2016 alone reached nearly $494 million, up from $486 million in 2015. Its primary markets of flour exports during that period were Afghanistan (US$ 329,779,938), Uzbekistan ($126,981,981), Tajikistan (19,981,792), Turkmenistan ($11,290,753), China ($3,336,999), Mongolia ($1,462,784), and Moldova ($708,395).
Morocco is another nation that sees the suspension of wheat-import duties that may last until mid-June. Key wheat importers, such as Turkey and Algeria, already issued their tenders, which means a proposal to purchase a specified quantity for a certain price. Turkey tenders to buy 305,000 tonnes of wheat while Algeria state grains agency OAIC bought around 240,000 tonnes of optional-origin milling wheat in a tender.
Vietnam also temporarily halted signing new rice export contracts to ensure food security. Vietnam said in a statement that they will first check whether they have sufficient domestic supplies to cope during the pandemic. This is according to business and stock market news provider Yahoo Finance.
Vietnam rice exports
Vietnam’s rice exports rose 4.2% in 2019 to 6.37 million tonnes, making it the world’s third largest exporter of rice. In 2018, the top 15 countries that exported the highest dollar value worth of rice were India: US$7.4 billion (30.1% of total rice exports), Thailand: $5.6 billion (22.7%), Vietnam: $2.2 billion (9%), Pakistan: $2 billion (8.2%), United States: $1.7 billion (6.9%), China: $887.3 million (3.6%), Italy: $614.1 million (2.5%), Brazil: $467.9 million (1.9%), Uruguay: $400.2 million (1.6%), Cambodia: $375.2 million (1.5%), Myanmar (Burma): $333.3 million (1.4%), Netherlands: $279 million (1.1%), Belgium: $243.3 million (1%), Australia: $237.6 million (1%), and Paraguay: $219.2 million (0.9%). This data was provided by trade metrics platform World’s Top Exports.
China, some African countries, and the Philippines are the largest buyers of Vietnam’s rice. The country’s Prime Minister Nguyen Xuan Phuc told the ministries of trade, finance, and agriculture to review their rice stocks first and submit a report on exports and supplies. While they are waiting for that report coming from the working group in Vietnam, they will suspend sighing all-new rice export. Those contracts that they have already signed will be addressed after the report is already available, the government added. This move by Vietnam is causing attention in the international market because it would be of “very great concern” if the food exporting countries are the ones to limit the supplies.
Export bans and supply strains
Russia is also keeping its door open regarding shipment bans and announced that it will be assessing the situation every week. Freight carriers in different countries are now struggling to deliver the goods by air, sea, or land as the coronavirus pandemic has forced governments of several nations to impose lockdowns that threaten the supplies of important products, like medicines. Consumers panic buying and stockpiling are also causing supply strains.
Serbia has expanded the ban on exports of sunflower oil. There are many uses of sunflower oil, be it for the skin, as medicine for lower bad cholesterol and constipation, for healing wounds and skin injuries, and in food as a frying oil.
London-based think tank Chatham House’s research director in emerging risk Tim Benton explained that they are beginning to see it happen already and they can also foresee that the lockdown could “get worse.” While supplies of food are ample, hurdles in the logistics are making it difficult to get products as the pandemic led to unprecedented measures, the threat of labor shortage, and panic buying. Not to mention that consumers from different countries are continuing to load their pantries. This is just the beginning of the economic fallout caused by the virus.
|Food protectionism, which is an economic policy of restricting imports from other countries, could cause harm as it is not made in response to supply problems or crop failures and driven by people’s anxiety. / Photo by eldar nurkovic via Shutterstock|
Singapore, working with other nations to maintain the supply of goods
Food protectionism, which is an economic policy of restricting imports from other countries, could cause harm as it is not made in response to supply problems or crop failures and driven by people’s anxiety. This is contrary to the move made by the government of Singapore, announcing that they will work closely with six other nations to determine and address trade disruptions that are caused by the pandemic. They will focus on the trade disruptions that may affect the flow of essential goods, as published by Singapore-based daily The Straits Times.
In a joint statement released by Singapore’s Ministry of Trade and Industry, it said that it is in their mutual interest to make sure that trade lines remain open. This is why they are committed to working with other like-minded countries to make sure that the trade flow will remain unimpeded and that significant infrastructure, such as seaports and airports, remain open to support the integrity and viability of the supply chains internationally. The statement also reads that countries must “unite” and “band together” to fight the virus rather than making decisions that will threaten the global trade.
The Ministry of Trade and Industry went on to say that as Singapore is a country that takes pride in its strong connectivity and openness, they are committed to bringing partners that will uphold the supply chain and trade connectivity and will help lead efforts in such areas.
Meanwhile, veteran agricultural trade consultant Ann Berg, who worked at global merchant firm Louis Dreyfus Co., opined that the extreme measures set by many governments could affect the food policy and will lead to domestic stockpiling, price controls, and rationing.
There is no clear sign that this trend will grow widely but it raises the question of whether this would disrupt the global trade flows.