Agricultural trade flourishes despite Covid-19 pandemic, says WTO
It's critical to keep trade flows open to ensure that food supply chains stay operational, says World Trade Organisation
The World Trade Organisation (WTO) says keeping agricultural markets open, as well as fostering a more favourable business environment, will be critical to spur the renewed investment the world will need post-Covid-19.
Agricultural trade has fared better than other sectors hampered by government lockdown measures across the world and in its new report published at the weekend, the global trade body says that initial lockdown measures focused on guaranteeing the immediate availability of food. This has been been followed by a second phase of policies seeking to mend broken supply chains and help producers to cope with the “new normal”.
The global Covid-19 pandemic halted economic activities and disrupted trade in many parts of the world, with governments imposing lockdowns to curb infections. Already, millions of jobs have been lost worldwide with small players, especially in the tourism, travel and hospitality sectors, hardest hit.
In its report, the WTO says while overall merchandise trade fell sharply in the first half of 2020, agricultural and food exports increased by 2.5% during the first quarter of the year compared with the same period in 2019, with further increases in March and April. However, the health crisis has exerted further downward pressure on food prices, and therefore on producers’ revenues.
In addition, while world food stocks and production levels for the most widely consumed staples — rice, wheat and maize — are at all-time highs, the Covid-19 pandemic’s impact on jobs and incomes have increased the number of hungry people worldwide, the WTO says.
The paper warns that while countries are still fighting the pandemic, its repercussions for food supply chains are still unfolding.
“While there is currently no reason the ongoing health crisis should turn into a food crisis, disruptions to food supply chains constitute a risk, with governments’ trade policy choices likely to determine how the situation evolves,” the report says.
According to the World Food Programme’s most recent estimates, 270-million people could be acutely food-insecure by the end of 2020, representing an 82% increase from before the pandemic.
“Producing and storing enough food is not sufficient if it does not reach those in need. By contributing to the availability and affordability of food, trade remains a crucial part of the solution to countries’ food security concerns — particularly at a moment when people’s incomes are under pressure.”
It is therefore critical to keep trade flows open, and to ensure that food supply chains stay operational, the WTO says.
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