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Back to the news list US: Food inflation concerns over panic buying, loc
23 March 2020 - Media Release - Fresh Food Portal
Panic buying and widespread lockdowns amid the Covid-19 pandemic could create serious
world food inflation despite the fact that staple grains and oilseeds from critical exporting
countries is in high supply, reports Reuters.
According to data analysis from the Food and Agriculture Organization of the United
Nations (FOA), the global spread of Covid-19 has caused
“All you need is panic buying from big importers such as millers or governments to create a
crisis,” Abdolreza Abbassian, a senior economist at FAO told Reuters.
Concerns over food inflation aren't a supply issue, he went on to say, but rather a
"behavioral change over food security". If, for instance, suppliers think that they will be
unable to get wheat or rice shipments in May or June, that may lead to panic buying and a
"global food supply crisis", the publication quoted him saying.
Famously, consumers across the world are stocking up on hand sanitizer and toilet paper.
But what the FOA says could be dangerous is the sharp uptick in staple grain prices
globally.
Chicago's wheat, a global benchmark for the industry, rose more than 6% this week, the
biggest gain in nine months. Similarly, rice prices in Thailand have climbed to their highest
since Aug. 2013.
Apart from fluctuating prices due to panic buying, border closings - like those in some
European Union countries - are also disrupting food supplies.
The concern, Ole Houe of IKON Commodities was quoted saying, is "having food at the right
time in the right place".
So, logistics for food security will be critical in the upcoming months and is already
presenting itself as a major global issue, analysts said.
In response, Houe also suggested that the 140 million metric tons (MT) of corn produced in
the U.S. could be re-directed from ethanol production to food supplies because of the drop
in oil prices.
When it comes to demand, analysts don't seem to have an answer for what to expect.
What it is going to look like in June or July?” a Singapore-based purchasing manager at a
flour milling company that has operations across Southeast Asia told Reuters.
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