In Bangkok’s usually bustling Sukhumvit District, measures to counter the Covid-19 epidemic have wiped out the business of Permruedee restaurant, reducing daily sales to 5% of the normal.
The absence of tourists in major destinations such as Bangkok , easily the most visited city in the world, due to travel restrictions to counter the spread of the coronavirus, translates into a sharp drop in demand for noodles, pastries and pasta, which are generally popular in these countries by hungry visitors.
“The tourists disappeared at the end of February and our sales have plunged, and since then it’s been steadily declining,” laments Permruedee, whose cafe specializes in Thai noodles and curries.
Tourism contributes anything between 10 and 18 percent to Thailand’s GDP.
The Tourism Authority of Thailand (TAT), a state enterprise under the Ministry of Tourism and Sports, uses the slogan “Amazing Thailand” to promote Thailand internationally. In 2015, this was supplemented by a “Discover Thainess” campaign.
Sex tourism often couched in health tourism with massage parlours the catch-point for sex-seeking customers has been the driving point .
But if no tourist comes, Permuedee and massage girl Lin are in the same boat.
“Tourist is God for us,” says Lin , who massages tourists in a parlour in Sukhumvit and often has sex with them . “No tourist, no food, no dress, no nothing,” says the girl from a village near the southern town of Hat Yai. Last month, the US Department of Agriculture (USDA) lowered its wheat consumption forecast to 749.78 million tons for the crop year ending June 2020, a figure that still reflects an increase from 737.05 million the previous year. But the effect of tourism could very likely mean that wheat consumption will be 10-12 million tons lower than the USDA forecast, estimates a grain trade analyst and two traders.
“We’re going to be overwhelmed by the lack of demand because of the coronavirus situation and the expected rise in global wheat production,” emphasizes Ole Hoe, director of brokerage IKON Commodities.
“At the moment, we are looking at a consumption of 10 to 12 million tonnes less than last year, but this is a very conservative estimate. It could be even lesser consumption, it could be down 30 to 40 million tonnes, about 5% less than last year’s global consumption. “
While global wheat production and stocks are expected to reach new record highs this year, falling demand means exporters are likely to experience a prolonged period of falling prices.
Asia, which accounts for 40% of global wheat consumption, could face a contraction in demand from 15% to 20% between April and June based on orders from major regional traders, the two Singapore-based traders who provided the forecast figures estimate.
“It was really quiet. The initial wave of purchases-triggered by panic – that had led to a 5-10% increase in the demand for noodles has disappeared, ” says trader Samrit Thatanabang , who has been operating in Asia for more than a decade.
Some mills in Southeast Asia have indicated that they will not place new orders until June at the earliest, he adds.
In Europe, the world’s second largest wheat market, the consulting firm Strategie Grains raised its forecast for EU common wheat stocks this season, partly due to a sharp decline in demand.
The confinement in France has reduced the demand for pastry and bread.
“We have outlets in Saint-Germain-des-Prés, on the Champs-Elysees and in the Tuileries Gardens where there is not a single tourist”, complains Fabrice Derouet, director of the Paul bakery chain, which has 750 outlets in 45 countries.
While flour sales in grocery stores have increased as some French households start making more cakes and bread themselves, home use generally accounts for only 5% of overall flour demand, with the majority being used by bakeries, restaurants and the country’s food industry, the National Association of French milling (ANMF).
In Southeast Asia – the region of the world with the fastest growing demand for wheat-eating — tourist arrivals in March in Thailand decreased by 76.41% compared to the previous year and in Indonesia by 64.11% compared to a year ago, which normally affects street vendors and noodle stalls.
“Because we sell much less, we produce much less, and therefore we use much less flour and raw materials,” says 75-year-old Salinee Witprasertkul, who holds a booth in Bangkok’s Chinatown.
“Tourists are no longer there. I’ve been selling here for 50 years, but this is the worst crisis I’ve ever seen. We’re all going to close,” she worries.
The sharp decline in daily wheat demand will create a backlog in the global grain logistics system as a whole. According to the USDA forecast, wheat stocks are expected to reach a record volume of 292.78 million tons by June.
Wheat prices, down about 6% this year, could fall further.
“Wheat remains too expensive because the market has not yet lowered the price compared to the destruction of demand,” says Hoe of IKON Commodities.
The USDA has reduced its estimates of wheat demand from March to April by about 5 million tons, and further downward revisions are expected for its May and June assessments.
However, the demand for pasta and noodles among confined families has benefited some wheat exporters. The Italian Association of food professionals, Federlimentare, says pasta factories are operating at full capacity to meet rising foreign demand, while ramen exporters in South Korea recorded a 31.5% increase in shipments in the first quarter.
And many Parisian bakers can still live on the local demand for bread despite the confinement.
“We have only 60% of our income … but people still take the time to go out for their baguette, ” explains Sébastien Mauvieux, Baker and owner of the bread bakery in the Montmartre district of Paris.
(Thai Lam is author of forthcoming “Regional Conflicts and Thailand’s Sex Trade. Danielle Macaroni is a food journalist in Paris)