As the result of the corona virus outbreak , many key actors in the supply has already quit the market, “the food supply chain is breaking”. Small players in the supply chain are as important as the big players. You can not exclude workers, small farmers, brokers, small logistic companies and retailers from the supply chain.

A future food shortage crisis is a real possibility, and you can already see the scarcity — and higher prices — of a number of products at your local grocery store. That said, the food shortage may be a more imminent threat globally than just in the United States.

If the average global family income decreased, then food supply becomes a challenge

It is not only the supply chain, the fuel production is declining due to limited natural economic resources, which has led to more pressure on gas production.

Moreover,COVID19 impacted negatively credit demand by households at global level. This will surely weaken the purchasing power of the households. Family priorities are more oriented toward very basic necessities and reducing demand on restaurants.

Across the world, the price of food is going way up. Wholesale food prices like wheat, sugar and vegetable oil have increased by a massive 33% since last year. That’s according to the UN’s Food and Agriculture Organization.

Bulk buyers of soybean facing difficulties to secure new quantities . Its supply has fallen steeply in recent months, due to insecurity that has put farmers off work last year, COVID-19 disruption, weather changes, and challenges with importation. Add to that the huge demand from china and the increasing consumption of meat at global level.

Now, the change in consumer behave has made the supply chain to restaurants broken. Many supplies to food and beverages designed for restaurants, bars, and food courts stopped due to inability to bear costs with low demand. The short term lockdowns during pandemic killed small actors in the supply chain as many products such as dairy products were not being sold, largely due to school, restaurant, and hotel closures. When farmers have to resort to throwing out their product, they do not get paid for their efforts. This has contracted the capacity of the agricultural sector, making recovery impossible in short period of time. Inflation and unemployability rates also has increased the flames. The Prices of the food before, during and after the pandemic kept increasing.

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Food Prices Continue to Increase

collapsing of the employability rates will surely lead to lower household income and increasing food insecurity.

Decreasing incomes, and hopeless American economy, a fake stock market bubble with red flags everywhere, and the US dollar, with a value that decreases day by day…These are just some of the early signs pointing us toward what is to come.

As the prices of the stock market are not based on the facts of the market , then this bubble will explode. When this bubble explode, then all the real factors of production prices will increase. Nature and market dynamics will return things back to what really worth. As soon as the stock market collapse the agricultural prices will go beyond the normal rates and the income of the middle class that rely on the financial industry will disappear. Everything will return back to the basis of the real economy. This will be a great reset that no body can control!

Forget the past economic and social disasters we have experienced. If I said that the health crisis was a walk in the park compared to what’s coming, maybe then you’ll really understand the severity of the situation that will unravel over the next few years.

What’s the role of global food trade?

Global food trade has to be kept going. One of every five calories people eat have crossed at least one international border, up more than 50 percent from 40 years ago. Low and middle-income countries account for around a third of the world’s food trade, which provides very significant contributions both to incomes and welfare. Countries that depend on imported food are especially vulnerable to slowing trade volumes, especially if as has been happening their currencies decline. While retail food prices are likely to rise everywhere, their impact is more adverse when sudden, extreme and volatile, and where food costs account for a larger share of household budgets and where spikes can have longer-term effects on human development and economic productivity in the future.

Trade wars precedes global wars. The major powers like China , Russia, and USA are major food producers to the globe. The recent cold war between the west and the east has gradually shifted the biological warfare to food warfare , agricultural commodities are big part of this war.

Ammar Alshami