September 19, 2022 — In addition to supply chain issues, exorbitant energy prices, the war in Ukraine and commodity price speculation, the industry is facing one of the hottest and driest years on record, which has exhausted farmers and reduced crop yields across countries. FoodIngredientsFirst examines how the climate continues to impact the foods of the future.
The drought in the northern hemisphere has been so severe that Europe, for example, received only 20% of its usual rainfall, according to a report by the Joint Research Center in collaboration with the Commission’s scientific advisory body European.
Southern Spain could lose most (up to 80%) of its Hojiblanca and Manzanilla olive oil varieties if global temperatures exceed the pre-industrial average of 2°C before 2050, according to a COAG study. a Spanish farmers’ union.
Spain is also expected to lose “more than 10% of the most fertile soil for quality wine” and 8% of its wheat production.
In addition, a report by Tunisia’s National Agricultural Observatory predicts that Spain’s olive yields will decline another 30% in production by the end of the century, with the North African country already suffering a drop in production of 7% – compared to the five-year average – due to the extreme climate.
The impact of climate change on the food industry is driving up inflation figures in many countries, with consumers paying record amounts for food, even as overall inflation figures are falling in most countries. Cost explosions in 2023 could be on the horizon.
Commodities around the planets are feeling the heat of climate change, leading to lower production, shortages and unavailability of products.
Consumers are already paying a premium of up to 75% for Dijon mustard, amid shortages caused by crop depletion due to droughts in France and Canada. Queen of Dijon revealed to FoodIngredientsFirst that the company is studying how to obtain more resistant seeds and is expanding to other regions of France to fight against climatic hazards.
Paddy fields in Italy – Europe’s largest rice producer – are expected to lose more than 30% of crops this year due to drought. Italian tomato growers also estimate an 11% drop in the harvest this year.
In the United States, tomato production is also expected to fall to 10.6 million metric tons from 13.06 million metric tons in 2015, mainly due to below average rainfall.
An article published in Nature claims that due to the concentration of tomato production in a small number of regions strongly affected by climate change, production will decrease by 6% in 2050 compared to the reference period 1980-2009.
Mexico must also actively protect its country’s water resources by trying to move some beer production south, where water is more available. Another product affected is chilli, with Huy Fong’s Sriracha not taking orders for its condiments for months due to a weather-related production stoppage.
Climate shocks have also been used as a policy tool. India experienced its hottest March on record, leading the Indian government to cut its wheat production estimate by 5.7%. While UN economist for the Food and Agriculture Organization of the United Nations (FAO), Monika Tothova, said FoodIngredientsFirst that India could still handle substantial exports, the country enforced a wheat export ban, justifying it because of the extreme weather conditions.
iPES Food Calls
The Panel on Sustainable Food Systems (iPES) reports that with half of the world’s farmers and rural workers living below the poverty line, even small price increases have devastating effects, with the problem being exacerbated by climate change.
“Climate shocks are already affecting agriculture regularly enough to create persistent vulnerability, while injecting a permanent layer of uncertainty into global markets,” the report said.
The IPCC estimates that climate change has reduced agricultural productivity growth by 21% since 1961 and by up to 34% in Africa and Latin America.
The institution warns that if temperatures rise 1.5 degrees Celsius above pre-industrial levels, 8% of global farmland will become unsuitable for agriculture.
Greed fuels inflation
In a year plagued by inflation, some producers and governments choose to artificially raise prices even further.
“Evidence suggests that financial speculators are jumping into commodity investments and betting on rising food prices, driving the world’s poorest people hungry. Governments have failed to curb excessive speculation and ensure transparency in food stocks and commodity markets – this needs to be addressed urgently. says Jennifer Clapp, iPES Food Expert.
This speculation has occurred in various countries, even in those where the government has attempted to reign in prices. In China, where small pig farms are prevalent, farmers sit on their cattle, waiting for prices to rise to release them as authorities fail to address what they call an “irrational reluctance to sell”.
Partly due to speculation, Chinese pork prices rose 22.5% in August – the third consecutive month of increases in staple meat in Asia. After price increases of 25.6% in July and 14.8% in June.
The Indonesian government has also attempted to artificially lower and then artificially raise palm oil prices, with mixed results. To drive down prices, they introduced a palm oil export ban.
However, when prices started falling, national authorities tried to stabilize commodity prices to help farmers, even increasing the use of palm oil in their biofuel blends.
Nevertheless, palm oil prices are lower today than a year ago, with many countries having ample supplies of raw materials available for export.
By Marc Cervera
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