Prospects for domestic and regional markets throughout ACP countries
COLEACP is in continuing conversations with colleagues, companies and organisations throughout the ACP countries as the coronavirus pandemic unfolds. Here is a snapshot of the feedback we are receiving on the impacts of the COVID-19 crisis on local and regional fruit and vegetable markets. COLEACP is working with these and other companies to mitigate the impacts of the pandemic and plan future activities.
Casamango, a young Senegalese company active in the distribution of fresh fruits on local and international markets is finding that as well as reduced export orders and potential drops in international prices, local deliveries are also falling. The company works with about 800 producers to supply mangoes, bananas, papayas, citrus and other local fruits such as madd. Local supermarkets are maintaining their orders with no decrease in volumes – but as restaurants and hotels are nearly empty, deliveries to these sectors are down significantly. With the closure of land borders with Gambia and maritime lines within the country, sourcing products from landlocked areas such as Casamance is becoming even more difficult and costly, and smallholder farmers in this region are more vulnerable than ever.
A trading company working with fruit and vegetable smallholders in Ghana reports that the pandemic has negatively affected its business operations due to the increasing lockdown and containment measures in Accra, the market for its produce. While food production and distribution businesses are exempted by government to continue their normal business operations, closure of shops due to reduced demand and enforcement of the lockdown has made operations very frustrating. Supplier vegetable farmers are unable to continue land preparation for chilli pepper, habanero and garden egg production because they cannot find seeds to buy, as agrochemical shops are closed due to the lockdown. Training of farmer groups on good agronomic practices has become difficult. The company is encouraging farmers to practise social distancing protocols, for example ensuring that farmers’ meetings do not exceed 25 people. To mitigate the situation, the company is exploring other avenues to source seed, especially in areas not currently in lockdown, and working to find other ways of selling the produce, including expanding to other regions where there is no lockdown. However, this strategy will increase the cost of operations.
A fruit packaging and processing company in Guinea specialising in the purchase, packaging, processing and export of mangoes and passion fruit has also told COLEACP that hotels stopping their orders has led to a build-up of unsold stock. Travel between Conakry and the interior of the country is regulated, making it more difficult for the team to travel to the field and supply the local market with passion fruit.
An SME in Sierra Leone that produces, processes and markets eggplants, chilli peppers and other fruits and vegetables, mainly on the local market, reports that a government lockdown and closure of the weekly regional markets means sales have ceased. An extension to the lockdown will mean crops cannot be watered during the high-pest dry season, potentially leading to a “total wipeout”. In addition, there is the additional responsibility of supporting workers who may not be able to access food.
In Togo, SME/SMIs are concerned about the long-term consequences and are asking for measures to cushion the shock (reduced taxation, reduction of social charges, reduction of fuel prices, suspension of bank credits). Staple foods are becoming scarce and expensive, and crop production is likely to be delayed due to the delay in fertiliser imports. The first measures taken to prevent the spread of the virus are already creating difficulties in the marketing of products. However, the government has been allowing the opening of markets while respecting hygiene measures, and the transport of goods.
Togolese company T-Farmers, which produces and sells pineapple, melon, watermelon, plantain, okra, tomato, chilli and cassava on the local market says closure of the processing units it delivers to means it is difficult to sell its produce. The company also faces a shortage of workers that is disrupting production and processing. If the pandemic persists and health and safety measures become more stringent, the few remaining distribution channels will be blocked and workers will be unable to leave their homes, resulting in production perishing in the fields.
AS Green Sarl of Benin, specialising in the production of fruit juices (pineapple, papaya, ginger, mango and watermelon) and selling products on the local and regional markets reports that major customers are reluctant to order because of the risks; production performance is limited because of the health and safety measures to be taken, and also because of contracts with pineapple producers that it can no longer, unfortunately, respect. The producers are therefore forced to sell at a loss to others. The falling production and uncertainty as to the end of the pandemic mean the company is fearful for it financial future.
The Managing Director of Nigerian ginger-processing company Rimma Guaranty Network Co Ltd, working with over 700 growers in the country’s Middle Belt shared some of the impacts of the current COVID-19 restrictions imposed by the Federal Government. Workers are not allowed to go to the processing facility or to the growing areas, as these are considered non-essential movements. As a result, the company is not able to gather a labour force for land preparation, planting, harvesting, or processing fresh ginger. Most markets in Nigeria are closed, or open under restrictions, reducing domestic market demand for dried ginger, so the company is now stocking dried ginger in its packing facility. Farmers are keeping ginger in the ground for longer, mulching the planted area to reduce the effect of sunburn, but the result will be inferior tubers. The lack of cash income is a major problem, and accessing credit to bridge this gap is not available for these smallholders. The government’s COVID funding comes with a lot of conditions and is not easily accessible. Currently there are 276 reported cases of COVID-19 in Nigeria, and the current mitigation measures are likely to be applied for a longer time. Looking forward, Rimma has already improved its hygiene and handwashing policy, and is actively looking for equipment to automate planting and processing and thus limit the gathering of people, while ensuring continuity of activities – if the necessary funds can be found. The company is also investing in digital equipment to facilitate distance learning and working towards organic certification for its (processed) ginger.
A Zimbabwe-based company, mainly an exporter of peas and chillies that also serves regional markets, reports that the logistics are still working: KLM is still exporting, and refrigerated trucks are still driving to Johannesburg. Although the volumes may be decreasing due to difficulties in finding labour, better prices are compensating.
One vegetable producer in Cameroon reported that subregional trade has stopped with the closure of borders, and the local trade has no market for fruit and vegetables, except for ginger and lemon, prices of which are increasing exponentially. Forced to destroy large quantities of cucumbers due to the lack of cold storage and no market, this company fears for its future, and is considering diversifying into the upcoming areas: garlic, ginger, lemon and pepper.
There are also reports from Togo that lemons are becoming increasingly scarce and sold “at gold prices” on various markets in the country.
Lemons, ginger and garlic are perceived as home remedies for coronavirus in many countries worldwide – but while eating healthily and boosting vitamin intake are generally beneficial to the immune system, there is no evidence that such remedies have any impact on COVID-19, and relying on such methods carries obvious risks, as this Reuters report describes.