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Published: 21 july 2020 16:20

COVID-19 savings in grain consumption: fewer tourists, less bread, fewer pizzas

Robertas Lapinskas, Founder and CEO of Agrorodeo
Robertas Lapinskas, Founder and CEO of Agrorodeo

Having paralysed Europe’s economy at the beginning of the year, COVID-19 has struck the tourism sector especially painfully. With countries closing borders, passenger aircraft have remained grounded in airport hangars, hotels have closed awaiting better times, as have restaurants and cafes.

And so, in this sector, demand for food has been suspended, at least temporarily and this has resolved the problem of its waste. In other words – no tourists, no guests, no need for neither bread nor pizzas.

With the grain harvest season nearing, Agrorodeo analysts have calculated that this year wheat harvests in Europe will be reduced by around 15 million tonnes, mostly due to the droughts occurring in spring and summer. Lithuanian farmers are watching their crops with concern after these were recently laid low by heavy rainfall.

Usual economic logics would dictate that smaller harvests would lead to more appealing prices for growers, making any rush to sell it unnecessary. However, coronavirus is looking to sink the world into an unprecedented recession and the COVID-19 factor could help to balance wheat supply and demand this year in an unusual way.

The exceptional traits of this recession are suspended tourism and a forced halt to restaurant operations. We saw the “trial run” of the hospitality sector not operating already at the start of the year. And it is uncertain as to whether this might not be repeated if a second wave of the pandemic were to hit in autumn.

According to the World Tourism Organisation, tourist numbers during the first four months of this year have shrunk 30-50% despite mass border closures beginning only in March. Closed restaurants increased the demand for flour and its products in domestic households, but they essentially didn’t need such materials themselves.

Representatives of Spanish flour mills advise that the demand for grain has shrunk around 20% lately. If the eating habits of locals have not changed radically within just a few months, it appears that this is the price paid by a country highly reliant on tourism - receiving an average of 89 million tourists visits per year.

Coincidence or not, but in Lithuania, bread sales began to fall from March, when the severe lockdown came into force in the country. According to the Agriculture Information and Rural Business Centre’s calculations, compared to the same period last year, bread sales in our country rose only in January and February, respectively by 17 and 2 per cent. However, in March they fell by 11% and in April and May, bread demand fell by respectively an entire 21 and 22%. A consequence of reduced demand in restaurants, cafes and hotels? Reduced wastage?

According to data from European Union institutions, 88 million tonnes of food, valued at EUR 143 billion, is wasted in the Union annually. Based on sometimes insufficient, accessible and quality data presented by member states, households are considered to be the weakest link inefficient food consumption. Nevertheless, the coronavirus-imposed suspensions on travel and the food consumption in public catering establishments that accompanies travel suggest that the vitality of the tourism and hospitality sectors could have a vast impact on grain demand this year.

And you cannot accuse hotels and restaurants that after ordering a pizza, they do not bring its leftovers that prior guests didn’t finish. Or that bread is presented in perfect freshness. In this sector, some of the unconsumed, remaining food is and will always be utilised. According to calculations by Agrorodeo analysts, solely due to the impact of COVID-19, the hospitality sector could “save” around 12 million tonnes of grain this year. So do not dismiss the argument that in order to satisfy people’s demand for food, some 16 million tonnes of grain will not be converted into fodder and so, the expected deficit in wheat apparently disappears.

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