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How is COVID-19 affecting the food chain in Asia?

Panic buying and stockpiling for food and necessities appear to have relaxed in some areas of the world as consumers realise that food supply isn't as much of as a concern as initially thought—as long as food retailers keep their doors open. But, with signs of lockdowns and movement restrictions being extended in countries across Asia, how will the food supply chain be impacted further down the road and how could changing consumer habits influence future purchasing decisions?

The supply chain as it stands

The APAC region's food supply chain is a complex web of interactions between producers, inputs, transportation, processing plants, shipping, storage and retail distribution. As the virus spreads and cases increase, there are seemingly countless ways the food system will be tested and strained in the coming weeks and months. A lack of collaboration between governments and the food industry could risk causing supply shortages across Asia and neighbouring regions as several nations enforce COVID-19 lockdowns.

At this stage, there is no supply chain pressure in sense of availability, but challenges around transport logistics and food movement are starting to surface. Restriction of movement and reduced workforce will severely hamper the production of finished goods. Since consumer demand of some well-established immune-boosting core micronutrients, such as vitamin B6, vitamin C, vitamin E, magnesium, and zinc, their availability and fair pricing could become a more serious issue in the short- and medium-term as supply becomes limited. Major ingredient supplying and manufacturing countries, such as China and India, will impose further restriction on export, which will severely affect market availability of products in other small Asian countries.

Short-term risks 

The effect of the current health crisis would be long lasting because this will have a direct impact on food production through entire supply chain. In the early stages of disease diffusion, significant increase in food demand is likely to take place. Importantly, we can expect changes in dietary patterns related to both consumer perception of virus sources as well as adjusting to a home-based lifestyle. We could face a possible massive decline in meat consumption (implicated by its zoonotic origins) as well as other higher-valued products, such as specialty ingredients as consumers are mindful of a looming recession.  In-store, consumers are quick to purchase staples and essentials, and we could also see shifts in demand for ready-made/freezer meals. Aversion behaviour is eminent for visiting shops, but e-commerce will increase. Finally, import-dependent countries will face greater challenges surrounding food supply.

Future forward

In the short term, millions of businesses in the food space will face lower consumer traffic, reduced income, and substantial unemployment. In the medium term, the surviving companies with renewed financial back-up will focus on evidence-based product development for preventing future diseases like COVID-19.

In terms of future product development, there's an opportunity to educate consumers about the combination of evidence-based natural solutions with pharmacological intervention when needed to target long-term immunity and disease prevention. Traditional medicine may possess some advantages in preventing or treating strains resistant to drugs against single viral target. Several Traditional Chinese Medicine and Ayurvedic formulations are showing some positive results as treatment, while few new ingredients such as fucoidan (bioactive seaweed compound), curcumin and cinnamon have shown significant anti-viral effects at different levels of interactions.

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