FIA and Oxford Economics Report Finds the Impact of Covid-19 on Asia's Food Trade to be Minimum at Present

Despite Asia’s food supply chain becoming increasing integrated and imported inputs playing a crucial role in domestic food manufacturing across many of the region’s key economies, a report by Oxford Economics suggests the supply chain has remained resilient during the COVID-19 outbreak, with limited evidence of specific impacts from the pandemic.

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The report titled “Mapping Asia’s food trade and the impact of Covid-19” commissioned by Food Industry Asia (FIA), the regional association representing Asia’s food and beverage (F&B) industry, found the pandemic and associated lockdown measures had not translated to supply shortages or price pressures, as yet.

According to Tom Rogers, Head of Macroeconomic Consulting - Asia, policy measures taken by several Asian governments to exempt the sector from lockdown measures have likely been crucial in keeping the food flowing. However, Rogers warned that some governments are already seeking to “protect” domestic consumers, potentially at the cost of food producers and consumers elsewhere in the continent.

Rogers outlines some of the other key findings of this paper: “Measures to remove barriers to food trade over the past couple of decades have enabled an ever-increasing integration in the food supply chain across Asia. And academic evidence demonstrates that this greater inter-regional trade delivers increased production capacity in the sector, and lower and stabler prices for households”

Using data sourced from Oxford Economics, Haver Analytics, UN COMTRADE data, and national Input-Output tables, the paper present the key cross-Asia supply chains for the food sector, and the relative reliance on imported food across the region, including key producers and exporters.

“This paper, which is part of a series of papers on Asia’s food trade, underlines the importance of open trade, identifies which cross-Asia trade relationships have been impacted by COVID-19, and surveys potential emerging price pressures in the food supply chain using latest data for consumer and producer prices, as well as taking a “look ahead” to future price pressures using latest data for commodity prices, shipping costs, and exchange rates,” says Steven Bartholomeusz, Policy Director FIA.

“What the research carried out by Oxford Economics clearly shows is that the “Asian food supply chain has shown significant resilience during the current phase of the crisis although as with other sectors reliant on sophisticated supply chains, the food industry has faced some challenges from the Covid-19 outbreak.”

FIA and Oxford Economics will be partnering on two subsequent papers. One that will quantify in more depth the key trading relationships making up the pan Asia food supply chain and assess the evolving evidence on price pressures along the supply chain, and a third that will review the outlook for the sector’s recovery, as well looking at other economic risk factors that form part of the post-COVID landscape.

FIA was founded in July 2010 by a group of leading food and beverage companies. From our base in Singapore, we seek to enhance the industry's role as a trusted partner in the development of science-based policy in the region. FIA provides an important hub for advocacy and debate. We bring together the food industry's most senior business leaders to champion initiatives that promote sustainable growth and support regional policies that deliver harmonised results.