The COVID-19 pandemic took its toll on international food markets. The disruptions to normal trade and the collapse in demand caused agricultural commodity prices to fall for the third consecutive month to the lowest level in fourteen months during April 2020, according to the latest Food and Agriculture Organization (FAO) monthly food price update.
The FAO Food Price Index (FFPI) fell by 3,4% month-on-month (m/m) and 3% year-on-year (y/y) to 165,5 points, with declines across all categories. In the meat sub-index, prices fell by 2,7% m/m and 1% y/y to 168,8 points, despite a slight recovery in Chinese import demand as the increased availability of stock continued to weigh heavily across most international markets.
Spike in domestic prices
However, the latest developments in some markets is that the COVID-19 induced closure of certain meat processing plants in the United States (US), Brazil and Europe caused shortages and the subsequent spike in domestic prices.
In the US, domestic wholesale beef prices jumped on average by 27% week-on-week (w/w) last week and were almost 100% higher y/y. For the pork market, the US pork cutout values surged by 21% w/w and 35% y/y during the same period.
Nonetheless, the situation might improve somewhat following President Donald Trump’s intervention of ordering the meat processing plants to continue operations and partially reopening the economy.
Animal diseases continue to pose a challenge
While the world is focused on fighting the coronavirus, animal diseases continue to pose a challenge to the agricultural sector. African swine fever (ASF) has been causing havoc for the international pork industry with outbreaks in Europe and Asia – China was hard hit with over 200 million pigs culled in 2019.
South Africa has recently reported an outbreak of ASF, a notifiable disease in terms of the World Organisation for Animal Health (OIE) requirements, in the Eastern Cape province. – Paul Makube, FNB Business Agriculture