Suppliers Strain to Feed a World in Lockdown

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Michael Winfrey
·4 min read
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(Bloomberg) --

While health systems around the world groan under the pressure of Covid-19, another crucial network is also showing signs of strain.

Supply chains — the linchpin of the global economy — are creaking as border closures, bidding wars and lockdown protocols imperil the flow of everything from food to vital medical kit.

While billions of people shelter at home, ship crews, truckers, meat-packers and grocery-store stock clerks form part of a massive effort to keep them served and the economy running.

They will need reinforcements and better coordination among the dizzying array of bureaucracies that oversee global trade before world leaders can fully re-reopen their economies.

Until then, supply chains are vulnerable.

After President Donald Trump said U.S. grocery retailers seemed “in very good shape” this week, the world’s biggest pork producer, Smithfield Foods, announced yesterday it would shut plants in Wisconsin and Missouri. That follows a bottleneck after it closed a South Dakota slaughterhouse where workers had tested positive for the virus.

Elsewhere, fruit and vegetable harvests are going to waste from California to Spain, while U.S. and British dairy farmers are dumping milk.

Nowhere is the risk more visible than the Middle East where, as Sylvia Westall and Layan Odeh report, desert nations import as much as 90% of their food. Memories of the global shortages that began in 2007 are still fresh there.

That experience offers a warning for countries worldwide. Then, as now, even vast wealth didn’t guarantee access to supplies.

Global Headlines

Backtracking | Trump’s assertion that he has the “ultimate authority” to dictate to states how to reopen their economies has quickly fallen apart. He’s now retreated, after constitutional scholars and even some conservative Republicans said such a move was beyond his presidential power. Trump has also backed away from an economic council, announcing he’d hold a marathon series of calls with business leaders instead. For the president, it’s becoming a pattern, Justin Sink writes.

Read more here on why House Speaker Nancy Pelosi hasn’t yet named members to a commission tasked with overseeing federal virus relief programs.

Silver lining | Preparations for the risk of crashing out of the European Union last year without a Brexit deal have left some U.K. businesses feeling better placed to cope with the economic disruption of the coronavirus lockdown. “The crisis management we went through has helped,” said one manufacturer. Still, Britain looks particularly susceptible to an external shock thanks to three years of underinvestment in its industries and uncertainty about its political future.

The U.K. is expected to extend its nationwide lockdown today, as officials said there are signs Britain may soon be past the worst of the pandemic.

Held up | Brazil is negotiating with Venezuelan President Nicolas Maduro to airlift diplomatic and military staff who are stranded after his government denied permission for a Brazilian Air Force jet to land in Caracas, without explanation, Samy Adghirni reports. More than 50 embassy staff and their relatives now don’t know if and how they will be able to leave. Brazilian President Jair Bolsonaro recognizes opposition leader Juan Guaido as Venezuela’s legitimate leader.

Fourth time lucky? | Israel may be heading for a fourth back-to-back election after Prime Minister Benjamin Netanyahu and rival Benny Gantz failed to reach a power-sharing deal by a midnight deadline. While parliament can consider alternatives for the next three weeks, and the two sides also plan to resume talks today, the country could face another ballot to break the political paralysis that has gripped Israel since December 2018.

Moving cautiously | Ethiopia’s Nobel Peace Prize winning prime minister made an impassioned plea in the Financial Times for international aid to fight the coronavirus in Africa, but at home he’s moving slowly. Abiy Ahmed only imposed a state of emergency last week and has kept the main international airport open and his national carrier flying out of concern stricter measures will derail one of the continent’s most dynamic economies.

What to Watch

Chancellor Angela Merkel is moving forward with plans to slowly start returning Germany to normal, allowing some smaller shops to reopen next week and children to return to school in early May. Despite ending its oil war with Saudi Arabia, Russia’s government will get less than $1 for each exported barrel of oil starting next month, reflecting crude’s biggest crash in a generation. Iranian ships repeatedly harassed and approached American vessels conducting operations in the Persian Gulf before disengaging after multiple warnings, according to U.S. Central Command.

Tell us how we’re doing or what we’re missing at balancepower@bloomberg.net.

And finally...Locked down and sun-starved, many Italians are yearning for the nation’s endless beaches and warm Mediterranean sea. But with summer approaching fast, some are asking whether that will even be possible while maintaining social distancing rules against the epidemic. If you’ve been on an Italian beach you know: There’s a lot of social, but not much distance, Chiara Remondini and Flavia Rotondi write. “We’re working on it,” Culture and Tourism Undersecretary Lorenza Bonaccorsi said.

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