COVID-19 crisis creates food supply disruptions all over Asia
Asian food businesses are feeling the burden of the COVID-19 crisis in the region and a longer period of lockdowns and restriction may change the outlook for the industry, warns the ASEAN Food and Beverage Alliance (AFBA) and Food Industry Asia (FIA), the regional associations representing ASEAN’s and Asia’s food and beverage (F&B) industries. Both associations are urging the governments in the region to ensure the unhindered production and supply of food and beverages as each country tries to contain the outbreak of COVID-19.
Across ASEAN countries already face food security challenges as well as current measures in containing COVID-19 that directly and indirectly impact the agri-food supply chain will only place further stress on food value chains. "As countries in the region tighten border access and restrict the movement of non-essential goods, the categorization of all food and beverages should remain as essential to ensure continuous food supply to all people. The availability of workers to support production is critical with the necessity of all industry players to reinforce efforts to keep employees safe and healthy.
This is especially critical as the food supply chain is a complex web that involves producers, agricultural inputs, transportation, other logistics, availability of workers and so much more. In the ASEAN region, food systems remain highly interdependent – and disruption to any part of it will have unforeseen knock-on effects. Furthermore, this interdependence extends to the broad range of non-food inputs that go into production – including animal feed, seeds, chemicals, oils and packaging," it is said in a joint press release from AFBA and FIA.
While AFBA and FIA recognize the need for governments to take extraordinary and unprecedented measures to protect its population from COVID-19, the issue at hand is the delay and disruption of manufactured food and beverage products, ingredients, raw materials, and packaging for domestic consumption and exports. Significant delays in manufacturing and distribution will slow down the entire food supply chain and could effectively contribute to a shortage of essential goods.
In Southeast Asia, the food value chain is not only crucial for ensuring food security, but also a major driver of GDP and employment in the region. In terms of GDP, the food value chain contributes around US$500 billion of economic output, which is around 17% of ASEAN’s total GDP. The share of jobs is even higher, accounting for 34% of the total labour force.
It is widely recognized that the impacts of the crisis could become more challenging over the coming months if the situation continues to worsen. If the main phase of the crisis was to continue for another six months, many businesses are predicting falls of 10-15% in production and revenue, and 5-10% in employment – when compared with pre-crisis expectations for 2020. Continous access to essential food can be achieved by maintaining stable food production, and access to workers, agricultural supply lines, transportation and logistics during this time of crisis.
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