Implications of COVID-19 for UK food supply resilience

UK food and agriculture imports remained broadly stable throughout 2020, despite the shuttering of hospitality businesses. Food trade with Europe contracted sharply in early 2021 after the Brexit transition period ended.

There are at least seven ways in which direct and indirect COVID-19-related risks to food and nutrition security can propagate across borders (see Table 1). These are not mutually exclusive and can occur within or between any component(s) of the food system to affect, for example, the supply of food reaching the UK, the ability of UK food producers to access factor markets, or the ability of consumers to afford and utilize the calories and nutrients they require.

In this chapter the focus is initially on vectors affecting the supply into the UK of FFD categories,35 as well as fertilizers and pesticides used by UK farmers. The broader dynamics within contemporary global food systems – which could have knock-on impacts for the UK – are then considered.

Table 1. Cross-border impact mechanisms

Vector of impact transmission	COVID-19-related example
Trade	Tariff and non-tariff barriers that restrict food/input supplies
Finance	Global food and/or agricultural input prices change in response to global supply availability and interest rate changes
Movement of people	Travel restrictions limit availability of migrant farm labour
Sentiment/psychological	Worries about supply shortages lead to food hoarding or re-evaluations of the importance of food provenance
Geopolitical	Retaliatory trade sanctions imposed on countries blamed for pandemic or trade-restricting measures
Biophysical	Coronavirus contagion from people travelling from areas where the virus is currently prevalent
Infrastructure	Food transport supply and port capacity reduced due to labour shortages and extra phytosanitary checks

Source: Authors’ compilation.

Below, these impacts are analysed through the lens of two of the four key pillars of food security (see Introduction): availability and access. Availability reflects the physical presence of appropriate food and nutrients in the country; access refers to whether people can physically reach the food and nutrients they require and desire and, if so, whether they can afford them. Of the other two pillars, utilization is less of a focus here, while stability and its temporal dynamics are considered throughout.

Food availability: trade dependencies and dynamics

Imports

The vast majority – 70 per cent by value, on average, since 2018 – of UK FFD imports come from the EU. Of the remainder, 36 per cent come from high-income countries, 41 per cent from upper-middle-income countries, 21 per cent from lower-middle-income countries, and 2 per cent from least developed countries. Geographically, Asia and Oceania are the most significant non-EU sources, followed by Latin America and the Caribbean, North America, and sub-Saharan Africa (see Figure 4, and for additional levels of data please see https://resourcetrade.earth/publications/covid-19-uk-food-nutrition-security).

The largest share by value of all UK FFD imports is that of vegetables and fruit (23 per cent) followed by meat and meat preparations (13 per cent) and beverages (12 per cent).

Figure 4. Origins of UK imports of food and agricultural inputs, 2019

— Source: Calculated from HM Revenue and Customs (2021), ‘Statistical datasets: Overseas trade statistics’, UK Trade Info, https://www.uktradeinfo.com/trade-data/overseas. For additional layers of data, please see King, R. and Wellesley, L. (2020), ‘UK food and nutrition security in a global COVID-19 context: an early stock take’, Figure 4, resourcetrade.earth, https://resourcetrade.earth/publications/covid-19-uk-food-nutrition-security.

While the total value and the regional and category shares of FFD imports exhibit seasonal fluctuations, there were no significantly abnormal changes to aggregate import patterns during 2020. A seasonal ‘dip’ and subsequent spike in import values between February and March 2020 reflected similar patterns in the equivalent months of 2018 and 2019. As this pattern was also observable in import volumes (see Figure 5), this suggests that international supply remained robust and that fluctuations in value did not reflect more widespread price increases. On a commodity basis, globally sourced imports of meats and fish appeared to fall dramatically during April and May 2020, and there is also evidence of lower beverage import values during these months than in the equivalent periods in 2018 or 2019. All of these apparent changes are likely to be connected to the forced shuttering of hospitality venues in the UK over this period. Otherwise, fluctuations do not appear to have been abnormal in character.

Figure 5. Comparative UK monthly imports of all food, feed, and drink, by value and by volume, January 2018–April 2021

However, there is a very noticeable discontinuity in the value of FFD imports from the EU in January and February 2021 after the end of the Brexit transition period (Figure 6). Imports appear to have recovered to some degree in March and April, but the medium-term consequences of Brexit on food trade with the EU are yet to be determined.

Figure 6. UK monthly imports of all food, feed, and drink, by region of origin, January 2018–April 2021

Import routes

The locations through which imports arrive in the UK have arguably assumed increasing significance due to both the COVID-19 pandemic and factors related to Brexit. The emergence of a new, highly transmissible coronavirus variant (later labelled the ‘Alpha variant’ by the World Health Organization) in the English county of Kent in late 2020 heralded an acceleration in the number of infections in the UK, leading the French government to close the two countries’ mutual border. This brought a temporary halt to cross-Channel supply chains reliant on ferry and rail transport. In the final months and aftermath of the Brexit transition period, there has been significant uncertainty over first the likelihood and then the nature of a UK–EU trade deal, and the implications this will have for intra-UK trade between Northern Ireland and Great Britain. Some adaptations, such as a new weekly roll-on-roll-off ferry route between Poole in Dorset and the Moroccan port of Tangiers, have been developed to bypass new Brexit-related complexities for trade with third countries.36

Unfortunately, import location data are not readily available for FFD imports from the EU. However, data calculated from HM Revenue and Customs datasets (reproduced in Figure 7), show that the vast majority of imports from the rest of the world (86 per cent by value, since 2018) arrive in England and Wales. Half of Northern Ireland’s FFD imports by value are animal feeds, and over one-quarter are cereals; Scotland’s imports are also mostly comprised of animal feeds, followed by fish, which accounted for one-fifth of import value in 2019. These proportions changed little over the course of 2020.

Figure 7. Food and agricultural imports into the UK from non-EU countries, by country of arrival, 2019

Means of transporting imports

The overwhelming majority of UK FFD imports, by both weight and value, arrive by sea. Most imports from the EU arrive on articulated lorries, transported to British borders by means of roll-on-roll-off ferries, whereas imports from the rest of the world typically arrive on container ships or dry-bulk tankers.

Airfreight accounted for 5 per cent of all FFD imports from the rest of the world in 2019 by value, and only 1 per cent by weight. It is most significant for the transport of vegetables and fruit, accounting for 11 per cent of the value of such non-EU imports in 2019.37 Airfreighted imports are particularly vulnerable to interruptions and delays in supply, as they are typically high-value perishable items – 61 per cent of the value of all FFD airfreighted imports from beyond the EU consists of vegetables and fruit.38

Airfreight has been more susceptible to COVID-19 disruptions, as around 70 per cent of all air cargo by weight is carried to and from UK airports in the bellyhold of passenger planes, rather than on dedicated cargo planes,39 and the sector has therefore witnessed a dramatic contraction as passenger demand collapsed during the height of the pandemic (Figure 8). In fact, as a result, some airlines embarked on refitting planes to enable cargo to be carried inside their passenger cabins.40

About 90 per cent of bellyhold freight mass is transported through London airports, and overwhelmingly through Heathrow airport.41 As such, the value of airfreighted vegetable and fruit imports from outside the EU declined throughout 2020, compared with previous years. There was also a slight contraction in airfreighted horticultural imports during November 2020, coinciding with the second national lockdown in England: however, the decline was nothing like as severe as that witnessed during the first national lockdown in March and April 2020 (Figure 8).42

Figure 8. Comparative monthly data for airfreighted vegetable and fruit imports into the UK from non-EU countries, January 2018–April 2021

Exports

The UK exports food and agricultural products to around 220 countries. The US, China and Australia are the UK’s most lucrative export markets outside the EU, with the US alone accounting for 10 per cent of the value of all of the UK’s food and agricultural exports. Although the UK exported over £25 billion worth of FFD and chemical agricultural inputs in 2019, this equated to only half the value of its imports, so that the trade deficit for these categories was nearly equal to the value of UK exports (Figure 9). The deficit is largest for vegetables and fruit; the only categories in which there was a trade surplus were beverages and pesticides.

Unlike imports, the value (and, to a lesser extent, the volume) of UK FFD exports witnessed a significant contraction between March and May 2020 (Figure 10). This was observable to differing degrees across the categories of fish, vegetables and fruit, and beverages, although it was largely driven by the last of these given its disproportionally large contribution to FFD export earnings. The decline in beverage exports partly reflected a contraction in worldwide demand, due to the imposition by many countries of restrictions on hospitality venues, although the depreciation of the pound against the euro in early 2020 also played a role. Following this initial contraction, UK exports appeared to be largely unaffected by the pandemic during the second half of 2020, with more FFD products being exported from the UK in December 2020 than in the corresponding month of the previous two years.

Figure 9. UK trade balance in food and agricultural inputs, by category, 2019

However, by early 2021, the end of the Brexit transition period was causing significant issues for UK export supply chains. As Figure 10 shows, FFD exports in January 2021 were only around half the levels (by value and volume) that they had been in January 2018, 2019 or 2020. Although FFD exports subsequently showed some recovery, they remained well below the levels of the previous three years throughout the first four months of 2021.

During the first third of 2021, complications and delays relating to new customs arrangements were constraining UK exports to the EU, as well as internal trade between Great Britain and Northern Ireland, which remains under EU internal market controls.

During that first third of 2021, complications and delays relating to new customs arrangements were constraining UK exports to the EU, as well as internal trade between Great Britain and Northern Ireland, which remains under EU internal market controls. This proved a particular problem for short shelf-life goods, such as horticultural produce and fish, which had already been hit hard by the closure of the hospitality sector. Indeed, UK retailers voiced concern that the impacts could worsen when short-term exemptions from some of the most burdensome bureaucracy expired43 – this was initially due to occur in March 2021, but as the deadline approached, the UK unilaterally decided to extend the grace period for a further six months.

Figure 10. Comparative UK monthly exports of all food, feed, and drink, by value and by volume, January 2018–April 2021

Food access: price trends

Despite the relative absence of agricultural input or food import constraints, the overall farm-gate prices for UK agricultural outputs have climbed steadily since September 2019, apart from a brief contraction in August 2020 (Figure 11). Although both crops and animal products generally contributed to this rise – and although both had, by the end of 2020, reached their highest values since 2014 – prices for animals and animal products fell by 4 per cent in April 2020. This was consistent with a decline in meat imports over the first phase of the pandemic and with a global fall in meat prices, reflecting a steep decline in demand from the lockdown-afflicted food services sector, as well as a reduction in discretionary spending (as a consequence of economic hardship) and logistical bottlenecks.44 Nonetheless, retail sales for in-home meat consumption actually rose during the first UK lockdown to levels normally only associated with the annual Christmas period.45 Crop prices have been more volatile, but have generally moved ahead of input costs, which have been rising since the third quarter of 2020.

Figure 11. UK monthly agricultural price indices by category, January 2018–March 2021

— Source: Calculated from UK Department for Environment, Food and Rural Affairs (2021), ‘Agricultural price indices’, https://www.gov.uk/government/statistics/agricultural-price-indices.

These farm-gate price dynamics do not necessarily translate into equivalent price movements for consumers, as consumer prices are affected by the costs of other supply-chain actors, especially for more highly processed goods and those that are imported or are the product of extensive supply chains. Following the supply constraints and largely rational grocery stockpiling purchases46 that were witnessed in March 2020, the Office for National Statistics (ONS) introduced an experimental dataset reflecting weekly price changes for many foodstuffs sold by online retailers in the UK to provide a timely signal of possible price inflation.47 Initially, this dataset covered only products in high demand (such as dried pasta, rice, tinned products and flour); since September 2020, it has reflected a broader basket of groceries. The data are consistent with the prices of food items included in the official consumer price index (CPI) measure of inflation, a lagging indicator in comparison to the ONS dataset. Aside from spikes in May and August 2020, the food and non-alcoholic beverages component of the CPI fell consistently during the last nine months of 2020, even though the overall CPI increased over the course of the year (Figure 12). Since the beginning of 2021, however, this trend has been reversed, with generalized food price increases becoming observable in the CPI – although this signal is weaker in the ONS online prices dataset. It is not yet clear to what extent these recent UK price changes variously relate to the constraints of the COVID-19 pandemic or the expiry of the Brexit transition period, are a lagging reflection of farm-gate prices, or are starting to reflect more sustained increases in global food (and other) commodity prices, which have been rising since June 2020 (see Figures 15 and 16, below). In any case, price rises are likely to exacerbate economic pressures on those segments of society which have suffered income shocks because of the pandemic or where food and nutrition security was already challenged prior to 2020.

Figure 12. UK consumer price indices: overall and food indices, January 2020–April 2021

— Source: Calculated from Office for National Statistics (2021), ‘Consumer price inflation tables’, Table 19, https://www.ons.gov.uk/economy/inflationandpriceindices/datasets/consumerpriceinflation.

UK Department for Environment, Food and Rural Affairs (2021), ‘National Statistics: Agriculture in the United Kingdom 2019’, 25 June 2020, https://www.gov.uk/government/statistics/agriculture-in-the-united-kingdom-2019.

Poole Harbour Commissioners (2021), ‘Shipping Link Announced Between Poole and Morocco’, 3 March 2021, https://www.phc.co.uk/shipping-link-announced-between-poole-and-morocco.

Calculated from HM Revenue and Customs (2021), ‘Statistical datasets: Overseas trade statistics’.

Ibid.

Civil Aviation Authority (undated), ‘Aviation Trends’, https://www.caa.co.uk/Data-and-analysis/UK-aviation-market/Airports/Aviation-Trends.

Smith, J. (2020), ‘Passenger Airlines Start Shifting Idled Planes Into Freight Business’, Wall Street Journal, 20 March 2020, https://www.wsj.com/articles/passenger-airlines-start-shifting-idled-planes-into-freight-business-11584737793.

Civil Aviation Authority (undated), ‘Aviation Trends’.

HM Revenue and Customs (2020), UK Trade Info: Overseas trade statistics.

Thomas, D., Eley, J. and Foster, P. (2021), ‘N Ireland food shortages set to worsen, say UK supermarket heads’, Financial Times, 12 January 2021, https://www.ft.com/content/8bdb2a68-8124-42d6-a477-d4ddf03000d8.

Food and Agriculture Organization of the UN (undated), ‘Bi-annual market reports: Meat and meat products’, http://www.fao.org/economic/est/est-commodities/meat/bi-annual-market-reports/en.

Revoredo-Giha, C. and Russo, C. (2021), ‘Purchases of Meats and Fish in Great Britain During the COVID-19 Lockdown Period’, Frontiers in Nutrition, 1: https://doi.org/10.3389/fnut.2021.648160.

For analysis of UK shopping patterns over this period, see Morley, C. (2020), ‘Why stockpiling is not the crazy, selfish behaviour that it seems’, LinkedIn, 21 March 2020, https://www.linkedin.com/pulse/why-stockpiling-crazy-selfish-behaviour-seems-chris-morley; and Morley, C. (2020), ‘One third more shopping trips than Christmas (and other amazing COVID-19 grocery shopping facts)’, LinkedIn, 31 March 2020, https://www.linkedin.com/pulse/one-third-more-shopping-trips-than-christmas-other-amazing-morley.

Office for National Statistics (2020), ‘Online price changes for high-demand products methodology’, https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/conditionsanddiseases/methodologies/onlinepricechangesforhighdemandproductsmethodology.

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03 International food system dynamics directly affecting the UK

Table 1. Cross-border impact mechanisms

Food availability: trade dependencies and dynamics

Imports

Figure 4. Origins of UK imports of food and agricultural inputs, 2019

Figure 4. Origins of UK imports of food and agricultural inputs, 2019

Figure 5. Comparative UK monthly imports of all food, feed, and drink, by value and by volume, January 2018–April 2021

Figure 5. Comparative UK monthly imports of all food, feed, and drink, by value and by volume, January 2018–April 2021

Figure 6. UK monthly imports of all food, feed, and drink, by region of origin, January 2018–April 2021

Figure 6. UK monthly imports of all food, feed, and drink, by region of origin, January 2018–April 2021

Import routes

Figure 7. Food and agricultural imports into the UK from non-EU countries, by country of arrival, 2019

Figure 7. Food and agricultural imports into the UK from non-EU countries, by country of arrival, 2019

Means of transporting imports

Figure 8. Comparative monthly data for airfreighted vegetable and fruit imports into the UK from non-EU countries, January 2018–April 2021

Figure 8. Comparative monthly data for airfreighted vegetable and fruit imports into the UK from non-EU countries, January 2018–April 2021

Exports

Figure 9. UK trade balance in food and agricultural inputs, by category, 2019

Figure 9. UK trade balance in food and agricultural inputs, by category, 2019

Figure 10. Comparative UK monthly exports of all food, feed, and drink, by value and by volume, January 2018–April 2021

Figure 10. Comparative UK monthly exports of all food, feed, and drink, by value and by volume, January 2018–April 2021

Food access: price trends

Figure 11. UK monthly agricultural price indices by category, January 2018–March 2021

Figure 11. UK monthly agricultural price indices by category, January 2018–March 2021

Figure 12. UK consumer price indices: overall and food indices, January 2020–April 2021

Figure 12. UK consumer price indices: overall and food indices, January 2020–April 2021