Impact of COVID-19 on agribusiness and the food industry in African and Asian markets

As the COVID-19 pandemic has unfolded, concerns over ensuring food security have been voiced in many countries around the world. While the crisis has immediate effects on food and agricultural supply chains, the negative impact of the COVID-19 pandemic is not limited to short-term disruptions in supply and demand.

Considering that the food and agricultural sector accounts for ten percent of global GDP and employs an estimated 1.5 billion people worldwide, the outbreak of COVID-19 will likely have far-reaching and noticeable social and economic consequences for the sector.

In order to evaluate those effects, the UNIDO Investment and Technology Promotion Office (ITPO) Germany, in cooperation with the German Agricultural Society (DLG e.V.), and SmartHectar Innovation, initiated an online survey among 800 companies from the European and especially German food and agricultural sector with business activities in African and Southeast Asian markets. The majority of participants were small and medium-sized enterprises (SMEs) headquartered in Europe, while a third of the participants represent larger corporations. Two-thirds of the respondents generate more than half of their annual turnover on foreign markets.

The survey confirmed that the coronavirus pandemic indeed represents a huge challenge to companies operating in the food and agribusiness sectors. While the immediate effects on business operations in African and Southeast Asian markets are still limited, they are already more pronounced in Europe in the form of reduced production and cancelled orders. However, despite the looming crisis, the long-term outlook of most companies remains rather positive, with only about ten percent of respondents pondering layoffs or closing down part of their business in foreign markets.

A majority of SMEs see the opening of new markets and continued international expansion as the right way to adapt to the crisis. Keeping markets open is seen as crucial to ensure global food supplies and to maintain social and economic stability.

Find the survey report here. 

Original source: UNIDO
Published on 11 August 2020