Advertisment

Global value chains: how is COVID-19 affecting fresh produce?

The current challenging conditions are affecting every single part of the fresh produce supply chain. GLOBALG.A.P. has published a report detailing how consumer habits have changed and the challenges producers […]
Mon 25/05/2020
Global value chains: how is COVID-19 affecting fresh produce?

The current challenging conditions are affecting every single part of the fresh produce supply chain. GLOBALG.A.P. has published a report detailing how consumer habits have changed and the challenges producers and suppliers are facing in response to COVID-19.

Changing consumer habits

Consumers have been behaving very similarly across regions. At the beginning of the quarantine measures, people bought in bulk and went to brick-and-mortar stores in droves (you could see long lines of people waiting outside the stores). Immediately after that, the number of online purchases jumped – even in developing countries, where ordering food online was not commonplace before.

Looking at consumer behaviour in more detail, demand for what are considered exotic fruits, such as physalis, has decreased in favour of other products. The managing director of a big producer and exporter mentioned that the most frequently bought fruits in the US market during the coronavirus period are oranges and lemons – where normally bananas, apples, and grapes top the list. Consumers are also doing their shopping during the week rather than waiting until the weekend.

Challenges for producers and exporters

We talked to companies based in Guatemala, Colombia, Mexico, Ecuador, Argentina, Peru, Thailand, China, India, Myanmar, Vietnam, Tanzania, Kenya, and various countries in Europe, noticing two major shifts:

Firstly, those who produce fruit and vegetables which consumers consider to be exotic are suffering a decrease in demand.

Secondly, those who export their products by air cargo are struggling due to the reduced number of flights.

Further, producers and exporters are struggling with other situations such as container shortages or increasing costs due to sanitary measures (e.g., masks, PPE, sanitizer). Most of the interviewed companies work with 1,000–12,000 farmers, and some of them have 5,000 workers along the value chain (more than 15,000 in peak season).

Companies are faced with rising labour costs, as well as labour shortages. Many migrant workers decided to return to their home countries or to their homes elsewhere in the country, and others were afraid of the situation. Some companies have had to hire and train workers who used to work in other affected industries (restaurants, hotels, etc.), which has increased costs. In addition, social distancing must be maintained when transporting workers to the fields. Some companies now need three times the amount of buses for the same number of workers.

Social distancing measures also affect packing houses. While fixed costs (rent, electricity, overheads) remain unchanged, fewer products can be packaged due to the reduced number of workers allowed in the building.

Farm audits are also affected by the COVID-19 crisis. Auditors of certification bodies are encountering great difficulties in traveling and fulfilling their duties in accordance with hygiene measures. To help alleviate these problems, the GLOBALG.A.P. remote auditing option is under development.

At the beginning of the coronavirus outbreak, most companies which export to the US saw an overall decrease in demand. Now, however, there is a general consensus that demand is more or less back to normal.

Tropical diseases (dengue, zika, etc.) continue to pose challenges on top of the problems created by COVID-19 and the associated lockdowns.

COVID-19 is an unprecedented challenge for all agricultural stakeholders which has considerably affected both supply and demand. Despite this, the supply of fresh fruit and vegetables to consumers has not stopped.

The future

Now is also a time to look to the future and prepare for recovery. We must all continue to focus on innovation and move forward in matters of quality, traceability, and sustainability. GLOBALG.A.P. is placing great importance on revising its IFA standard for version 6. The revised standard will shortly be reviewed in co-operation with many stakeholders during the World Consultation Tour.

 

Advertisment
Advertisment

Most read on social media

Events Eurofresh-distribution

Calendar of Events

M Mon

T Tue

W Wed

T Thu

F Fri

S Sat

S Sun

0 events,

0 events,

0 events,

0 events,

0 events,

0 events,

0 events,

0 events,

3 events,

Fruit Attraction 2021

2 events,

2 events,

0 events,

0 events,

0 events,

0 events,

0 events,

0 events,

0 events,

0 events,

0 events,

0 events,

0 events,

1 event,

Virtual Event Virtual Event

Cool Logistics online 2021

0 events,

0 events,

0 events,

0 events,

0 events,

0 events,

0 events,

0 events,

0 events,

0 events,