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The Food and Agriculture Organization of the United Nations, FAO, is concerned. The coronavirus is likely to lead to global food inflation if panic purchases of commodities increase.
” The last thing we need are panic purchases from large importers, millers or governments. They would create a food crisis “Warns Abdolreza Abbassian, the FAO economist. With the confinement that is gradually gaining ground in western countries hit by the coronavirus, the fear of running out leads to irrational behavior: raids on flour, rice and pasta in supermarkets. The FAO fears that the big importers will do the same thing with the raw materials necessary for all these basic products: cereals.
However, world cereal stocks are very comfortable. They are even the third largest stocks in twenty years. “ It’s not a supply problem, points out the FAO economist, but a change in behavior towards food security. What would happen if the big buyers thought that they could not get supplies of wheat or rice in May or June ? This could lead to a global food supply crisis. “
Sudden Chinese request
Panic purchases may worsen logistical problems. Transportation has been restricted to stem the epidemic. In France, for example, the grain industry is struggling to find enough trucks and keep factories and ports in operation, notes Agritel, a consulting firm in the agricultural sector. And that is combined with strong demand on the international scene right now.
After weeks of confinement, t China has ordered record quantities of corn, wheat and soybeans from the United States, the first materialization of the preliminary trade agreement signed last January between Beijing and Washington. South Korea is shopping, as is Saudi Arabia. Wheat prices rose 7.5% in one week on the Chicago Stock Exchange. And on the European cereal markets, there is also a strong rebound in prices.