Measures put in place to prevent or slow the spread of COVID-19 are also disrupting the functioning of food supply chains. The impacts on labour are of particular concern. The food sector will be vulnerable to the negative impacts on the workforce from the spread of COVID-19 (workers being sick or in isolation), and will face additional production and distribution costs as a result of health and safety measures introduced to reduce the exposure of their workforce. While the virus transmission mechanisms are not fully understood, two clear mechanisms are: (i) people working in close proximity; and (ii) people touching contaminated surfaces. Managing these risks will require immediate changes to the way food is processed and distributed. Many of those changes are already underway, but may be difficult to implement in the short term due to challenges related to sourcing masks and protective equipment for workers.
The markets for perishables are likely to be affected more than those for cereals and prepared foods. Close working conditions in packing and processing facilities put the workforce at risk of contracting COVID-19. The need to meet social distancing requirements, for example, in packing and grading fruit and vegetables10 and in processing livestock products, in addition to absenteeism, is increasing costs and reducing production capacity even as consumer demand in supermarkets increases. The available workforce has also been reduced due to rising infection rates and absenteeism, and in response to lockdowns, even in critical sectors. In addition to disrupting supply, infections in processing facilities have in turn led to reductions in demand at the farm level.
Lockdowns and limits on the mobility of people are also affecting the provision of key food safety, quality and certification checks, including those that are required to facilitate trade, such as physical inspections of goods to certify compliance with sanitary and phytosanitary requirements (SPS). Moreover, additional checks may be required in response to new biosecurity arrangements for the sector, implemented in response to COVID 19. In some cases, the relaxation of standards in order to meet domestic food needs calls into question the objective of such measures in terms of health and safety versus protection of domestic industries.
Measures to contain the spread of the COVID-19 are causing delays and disruptions to transport and logistics services. Border closures and additional procedures and checks have led to congestion and delays, affecting the transit of perishable products. For example, social distancing requirements have reduced the numbers of import and export inspectors at borders, increasing the time needed for customs clearance.11
The grounding of airlines, and the increasing cost of international freight as a result of lower trade volumes and a lack of commercial passenger flights, are causing significant problems for the export of higher value perishable food products, including seafood, fruit and vegetables.12 There are reports that following travel bans, air freight costs have risen by about 30% between China and North America and by over 60% on some important Europe-North America routes).13 Delivery times have also increased.14
Port closures pose a problem too when product has to be diverted from one port to another or to a different importing country altogether. At the time the virus struck, large numbers of shipping containers were in Chinese ports, and restrictions on their movement have led to a shortage that has seen the price of containers rise (in some cases considerably). This too has had flow-on effects for the price of cargo, including for food products, and the volume of traffic. For example, in March, dockworkers at China’s Shenzhen port, the fourth-largest in the world by container volume, reported that business had fallen off by an estimated 50-75% since the COVID-19 outbreak began.15 Diverting cargo may also require additional documentation for border clearance.
Transport restrictions and quarantine measures are also likely to impede access to inputs needed by businesses in the food sector. For example, there are reports that interruptions to fertiliser production by some suppliers – due to a lack of workers – have created difficulties for the manufacturers of CO2 and, by extension, the food industry. CO2 is used for different food applications (freezing, carbonation of drinks, and to conserve products in a controlled atmosphere, such as packaged meats, allowing consumption deadlines to be postponed). This poses a challenge for food manufacturers, in particular carbonated drinks manufacturers and large dairy groups.16
The COVID-19 pandemic may have implications over the short and long term for food loss and waste. Supply chain losses may increase in the short-term because of logistical bottlenecks and a contraction in the demand for perishables that are often consumed away from home (e.g. milk, eggs and fresh fish). Consumer waste may be increased by hoarding and panic buying, although most of these purchases have been for longer life items, such as flour and pasta. Conversely, restaurant waste, e.g. from the need to offer menu choices, will have been eliminated. Over the longer term the food sector may identify better ways to manage inventories, and consumers may also reassess their shopping and consumption habits, with a view to reducing waste.