COVID-19 exacerbates food insecurity. For now, supermarket shelves remain well-stocked but it could pose a challenge given a complex web of interactions involving farmers, agricultural inputs, processing plants, shipping, retailers and more. Lockdown measures and stay-at-home advisories have disrupted supply chains and food production. More than 30% of fleet are already not operating. Crops are rotting in the fields or at the depots waiting for trucks that never arrive. Major suppliers like Vietnam, India and Cambodia are reducing or even banning rice exports to make sure their countries have enough food to cope with the pandemic. Australia exports about two thirds of its agricultural products but this crucial trade is now under threat while Hong Kong and Singapore import more than 90% of their food. These constraints hit prices immediately.

Companies upstream in the food supply system, such as meat packing and food processing plants, have struggled to survive. Many players are making forays into home delivery, considering contactless delivery and drive-by pickup options for individual  buyers and looking into online ordering and collaborative delivery models. Growing season in many places may have to be delayed. Farmers are hesitating about production as people are cooking more at home. A lot of food and beverage institutions are in crisis mode. This calls for a new look to application of technological and delivery infrastructure.

Tech giants on the other hand, are getting richer, more powerful and changing their political fortunes, eroding traditional industries like brick-and-mortar retail, food service, and media and entertainment. General public and governments are becoming more reliant on tech services. Titans like Facebook, Amazon, WeChat are viewed as essential services in this lockdown, Google and mid-size tech companies are using artificial intelligence and big data application to fight Covid-19. The pace of the probes against these companies has obviously slowed for various reasons. Share prices of Amazon and Microsoft hit at or near records. Facebook is on hiring high-skilled talent, announcing the hiring of 10,000 new workers this year. Amazon announces more than 175,000 new, mostly lowwage jobs in warehouses and delivery. Nonetheless, a cautious attitude prevails as these giants anticipate significant losses in income from advertising, particularly from the travel, entertainment and retail industries in the coming months.

US’ App Annie survey between January to early April showed a 145% usage surge in grocery apps like Amazon, Prime Now, DoorDash, UberEATS, Walmart Grocery among others while a 36% increase in usage of social apps like Facebook, Instragram, Snapchat, Tik Tok, WhatsApp to name a few to keep communication active. Entertainment apps saw a rise of 18% over the same corresponding period.

This trend divergence will continue to widen until Covid-19 resolved. As at now, there are seven novel coronavirus vaccine candidates that have entered human trials across the world. The WHO has listed over 80 others -- including some by heavyweight pharma companies -- that are in various stages of pre-clinical research. Leading the race is the joint effort by the Chinese biotech firm CanSino Biologics and an arm of the People's Liberation Army which, is currently in Phase II. This holy grail, which involves at least three phases of human trials, at its earliest possible application would be around a year-and-a-half away. And that is an optimistic assessment.

Chee Seng, Wong
CIO, Athena Advisors
wong-chee-seng@outlook.com