Commodity Conversations Weekly Press Summary

China’s Fourteenth Five-Year Plan (2020-25) will focus on stabilising national food security, notably grain management. An official at the National Development and Reform Commission noted that the state’s reserves were already playing their roles in market stabilisation, arguing that “we have enough reserves to respond to any risks or challenges.” 

Massive food imports are a cause for concern for the Communist Party, however. As such, several analysts forecast that crop imports are likely to ease by the end of this year or the next, and that the recent surge was more the result of frontloading demand than an actual increase in consumption. A Chinese consultant suggested that there was enough food in the country and that a big part of imports was going into state reserves. 

Besides, China should see a bumper grain crop this year and farmers are being told to stick to planting grains. Billions are being poured into the National High-Quality Grain Project which aims to build a “national industrial food security belt.” The project includes developing higher yielding seeds and cutting down on losses in the supply chain. China is also headed towards a pork surplus before the end of the year, according to an economist. An analyst at Rabobank noted that this would have significant repercussions on global trade, notably for countries that have been boosting swine production to export to China. On the other hand, some say that the new African swine fever could slow the recovery in the swine population. 

China has also been focusing on diversifying who it imports food from. A report by the USDA said the combination of trade issues, the pandemic and the swine fever have exacerbated China’s intent to avoid depending on US and Canadian supply. The competition is only expected to get tougher, the report said, urging US producers to focus on developing premium products, notably foods that have nutritional and health benefits. 

In China, the government has stepped up efforts to educate consumers to check for counterfeit food and drink products which have been known to cause poisoning. The government identified 1,400 counterfeit products between May and November 2020, a surge attributed to the pandemic-led increase in online shopping. It is encouraging consumers to check labels to spot inconsistencies. 

The UN Committee for World Food Security endorsed the first voluntary guidelines to end hunger last week as an estimated 3 billion people lack access to healthy food. This comes as a report by Bloomberg warned that global meat prices are about to surge as a result of higher corn and soybean prices. Feed costs have gone up by a third, with increases expected to be felt for most types of meat. 

Similarly, companies such as Kraft Heinz, Conagra and Unilever warned they would increase the price of food products that are the most exposed to the increase in grains, sugar and edible oils prices. The US Consumer Price Index showed that food prices were up 3.7% on year in January. The US Federal Reserve, on the other hand, downplayed the issue, arguing that it was a one-off price hike and did not qualify as inflation. 

Regardless, the US President passed an executive order earlier this month committing to fully refund restaurants providing food aid. The idea is to allow those who need help to get a nutritional cooked meal – instead of unhealthy packaged food – and help restaurants with occupancy rates. However, an analysis by The Counter argued this would not be as easy as it looked. The government body in charge of refunding is known to be slow, and there has been no agreement as to what are “approved expenses.”

Mars Food, meanwhile, committed to delivering 5.5 billion healthy and sustainable meals to families globally by 2025, having already achieved its target for 1 billion more healthy meals by 2021. The group’s strategy is to focus on food accessibility, awareness and content reformulation by, for instance, increasing fibre and reducing salt content in food. 

The US spent USD 770 billion on restaurant orders in 2020, out of which 63% was for takeout, according to a new report. Around two thirds of the takeout orders were to restaurants that only offered sit-down dining prior to the pandemic. The good news for restaurants is that consumers were found to spend almost 50% more when ordering through a digital platform. But sometimes, it can be tricky to get your food from the restaurant to your home. A student in the UK got quite a shock when her UberEats driver told her he’d eaten her order. And he wasn’t joking. 

This summary was produced by ECRUU

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