// Expensive onions, once an Indian meme, is now reality for many. Governments worldwide have limited food exports, but Australia has doubled down on exports with loan guarantees and schemes.
Lockdowns and travel restrictions worldwide have taken their toll on consumer spending.
Global food prices are projected to fall.
Coupled with local labour shortages and reliance on regional supply chains, new limits have actually resulted in rising prices for staples. Most notable of these is rice, which has risen to a 7-year high.
- Indonesia has seen increases in the prices of sugar and onion. The former is rationed.
- The Philippines has issued a price freeze on agricultural products.
- India has seen vegetable inflation decline from 31.61% to a more reasonable 18.63% between Jan-Feb and Feb-March.
Australia moves quickly to support exporters
On 1 April 2020, Australia’s Export Market Development Grant (EMDG) program was given an extra $49.8 million funding.
On the same date, a $110 million package was announced to secure freight access for agricultural and fishery exports, dubbed the The International Freight Assistance Mechanism.
The plan is to use return flights to ferry medical supplies back into Australia.
This could be a lifesaver, especially for fishery and aquaculture exports that rely on Chinese demand, such as rock lobster and abalone.
According to a report by the Department of Agriculture, Water and the Environment:
- “In 2019–20 the value of Australia’s agricultural exports is forecast to fall by 11% to $43 billion.”
- “Fisheries and aquaculture production value is forecast to decline by 12% in 2019–20 to $2.81 billion.”
The forecast for 2020-2021 is not particularly rosy either, as meat exports are expected to decline in value once swine stocks recover.
Considering both the FAO data and the forecasts of the department, Australia’s agricultural exporters will be in for a rough time ahead.