Global agricultural trade was more resilient during pandemic: WTO

The global trade in food and agricultural products showed more resilience during the Covid-19 pandemic although immediate policy responses, made by different governments during the virus outbreak, were assumed to be affecting the sector negatively.

In the first quarter of 2020, the sector fared better than others, registering a 2.5 percent rise in the export of agricultural and food products compared to that during the same period last year, according to a report of World Trade Organisation (WTO).

Of the first three months, only did March see a 3.3 percent spike in food trades compared to that in the same month in 2019, said the report published on August 26.

The report titled "Covid-19 and Agriculture: A Story of Resilience" also showed the ongoing crisis exerted further downward pressure on food prices, and therefore on producer revenues. Food prices were already on a downward trend at the beginning of 2020, though.

The initial panic buying led to a sudden hike in demand for agricultural products such as staple food, processed fruits and vegetables, thus increasing home-based consumptions.

But, the demand for non-food agricultural products dropped dramatically, highlighted the report, leading to a sharp decline in overall merchandise trade in the first half of 2020.

However, the trade in agricultural and food products experienced a little contraction in April, with only a 0.6 percent increase compared to that in April 2019. Besides, the preliminary data indicated trade in such goods fell by 1.3 percent in May this year compared to that in May 2019.

The report said Central America and the Caribbean regions experienced the highest export growth in the first quarter, followed by Africa and the Middle East.

Asia and the Pacific saw a negative export growth during the same time, although its downward trend in the trade of food and agricultural goods changed to positive in April compared to that in the same month last year.

On the other hand, Europe and North America posted a negative export growth in April 2020.

In imports of food and agricultural goods, every region registered a positive growth in the first quarter, with the Middle East experiencing the highest.

The month-wise imports showed South America witnessed the highest positive growth in March and Africa did the same in April.

The WTO report also said there is currently no supply-related reason to turn the ongoing health crisis into a food crisis. However, disruptions to food supply chains constitute a risk for global food security.

It further indicated that governments' trade policy choices will play a major role in shaping how the situation evolves.

Transparency should be maintained for food security because asymmetric or insufficient information creates uncertainty that hinders policy decisions, recommended the report.

Addressing the issue, the report highlighted that timely sharing of trade-related measures as well as making information available on production, consumption, stocks and food prices will help the market to function effectively and contribute to ensuring global food security.

The report also highlighted the World Food Programme's most recent estimate that said 270 million people could be acutely food-insecure by the end of 2020, representing an 82 percent increase from that before the pandemic.

Trade remains an important part of addressing countries' food security concerns to increase food availability and affordability, especially at a time when people's incomes are under pressure – and therefore critical to keep trade flows open and ensure that food supply chains stay in operation.

Bangladesh's exports shrank too

Meanwhile, Bangladesh's exports of agricultural goods also fell by 5.16 percent to over $862 million in the last fiscal year, from around $909 million during the previous fiscal year (2018-19), according to the Export Promotion Bureau data.

During the pandemic, Bangladesh suffered in trade of agricultural products, with a 3.42 percent negative export growth in the first quarter of 2020.

The export scenario in agricultural goods worsened in the second quarter, with the country experiencing a 24.78 percent negative growth.

Bangladesh felt the hardest blow in exports of agricultural products during the March-May this year, posting a 61.67 percent negative growth in May alone.

In April, it saw a 50.39 percent negative export growth, followed by March (31.73 percent).

However, June showed a sign of recovery as Bangladesh exported $81.90 million agricultural product in that month. The export value of agricultural goods was $54.50 million in June 2019.

Moreover, the latest data show the country's agricultural products export increased by 30.92 percent in July 2020 compared to that in the same month last year.