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Philippines – Shortages and higher prices: Food insecurity signs
Apparently, most Filipinos are back to what they love to do most: malling and eating out. After months of restraint, even despite weekly warnings of rising COVID-19 cases, malls are teeming with families while restaurants are packed with diners.
This sudden surge in consumer demand, as expected, creates its own little kinks. First, it was a shortage of McDonald’s French fries. Mary Grace’s ensaimadasfollowed soon after. And just recently, chicken from Jollibee, McDonald’s, and Mang Inasal.
Each has different stories explaining the situation. The French fries and ensaimada incidents were explained as an offshoot of global supply problems. The chickens were a matter of not having the right sizes that food chains have to adhere to, lest their customers start complaining.
As economists are wont to say, it is easier to cut back on production or operations, as what happened when lockdowns were ordered, than to rev up operations to normal levels, especially when faced with upticks in demand. Yes, supply chains don’t get back to normal at the flick of a finger.
For months during the last two years, many restaurants had to reduce their kitchen stocks, and even let go of employees. Now that people are going back to their favorite pre-pandemic activities, like eating out, fast food chains are finding that not all their suppliers are ready to rumble.
This is exactly what happened to their local chicken contract growers who had to cut back production by 20 to 30 percent during the lockdowns, only to now be asked to ramp up deliveries of special chicken parts under a business-as-usual level.
More problems
Unfortunately, our local chicken growers are now burdened by other problems. Feeds, which make up 60 to 70 percent of the cost of growing a chicken, have risen by as much as 30 percent. Labor and transportation costs have likewise gone up. Some growers even have to contend with pestilence.
Bringing operations back to normal production levels and having to deal with increased overhead costs could represent significant financial hurdles for small- and medium-sized chicken growers, more so if they had dipped into their savings during the last two years to survive.
Big commercial growers are in a better position to access loans, but the bigger challenge is ensuring that they have enough supply of chicks or that the feedmills will be able to deliver the higher volume of feedstock needed to grow chickens.
From egg fertilization to hatching to a chicken growing to market size takes about 60 days, which could be too long for fast food chains whose impatient customers can’t wait to sink their teeth into those crunchy juicy drumsticks or thighs.
The good news for those outlets and their loyal customers affected by the shortages is that this chicken supply problem is temporary and will go away in a month or two. The bad news, though, is that the high prices will likely stay on even until next year.
The elevated inflation data last June reflects the effect of extraordinary high prices of crude oil on food and transportation costs in a household’s monthly spending. With crude likely to remain high throughout the year, we can expect chicken prices to stay at their present levels, that is, at about 30 percent higher than last year’s if government measures are inutile.
Not alone
If it’s any consolation, no country that depends on imported fuels has been spared by rising commodity prices. The Philippines is not alone in its chicken supply problems, or for that matter, experiencing threats to food security.
When the Malaysian government last month issued an export ban on its locally produced chicken to try to keep inflation under control, Singapore was forced to rethink its food security program. The island nation is largely dependent on Malaysia for its fresh chicken supply.
Last week, Australia was in the midst of a chicken nuggets shortage, apparently because of labor and carbon dioxide (CO2) shortages that affected the production of this favorite snack of Aussie children. CO2 is used to preserve the shelf life of chickens.
A shortage of agriculture workers in the UK is threatening a disruption of milk, vegetables, and pork deliveries. Dutch farmers are protesting against emission curbs on tractors and trucks, sparking fears of food shortages. Fishers sympathetic to the farmers are adding to the tension. The situation is direr in poorer countries in Africa where climate disruptions have affected farming on which families rely for their food.
In other parts of the world, mustard, sriracha, chocolates, coffee, wine are just a few products that are facing supply shortages because of climate change.
Abnormal times
These are abnormal times. Things we thought we knew well before are no longer to be taken for granted. The Russian invasion of Ukraine has definitely played a big role, arousing in capitalist countries a fear of socialist governments and their agenda in the world order.
Europe and the US are no longer just concerned about the grains and oils that cannot be shipped out of Ukraine, but of the rising power of Russia that has made it righteous in its campaign to expand its territories through aggression.
Even China’s growing influence in Asia is now being regarded as a threat to the economic systems that Europe and the US espouse. The Group of Seven Summit last month ended with a more open defiance against the growing influence of Russia and China.
With such stark geopolitical shifts, the world’s food security faces bigger risks.
Source: https://www.philstar.com/business/2022/07/12/2194665/shortages-and-higher-prices-food-insecurity-signs