Farm to fork is a favoured phrase amongst foodies. It’s also much used in corporate presentations to extol traceability in the supply chain, provenance and the use of local ingredients. 

However, for many food companies, their supply chains are far from local.

Take noodles, a mainstream dish across Asia-Pacific. There are many varieties from Japanese Udon to Malaysian Hokkien, Chinese instant fried not to forget Thailand’s Bamee. Wheat is not widely grown in Asia and the region relies upon imports from the US, Canada and Australia. Some say that Asian noodles account for up to 50% of the region’s wheat usage.

In 2021 a maelstrom of commodity price rises is challenging farm to fork supply chains. Wheat futures are up 41% year on year, whilst corn is up over 101%. There are several factors driving the price rises from harsher weather in North and South Dakota, to stronger demand in China lowering global reserves, to a poorer harvest in South America.

As always with price rises, some are making hay whilst others are still working out how to respond. Archer Daniel Midland, one of the world’s largest commodity traders has seen its share price rocket 98% this year, whilst Bunge stock, a key competitor, is up over 160%.

Food companies on the front line are having a harder time. Indonesia’s PT Indofood who has a 50% share in instant noodles, seems to be struggling if one looks at its stock price – down 14% year on year. Nissin Food in Japan who have a commanding dried noodle business are also down 13%

Some food companies have announced price increases but they are in a minority, for now. Japan Oil Mills has raised prices this year as has Japanese udon chain Marugame.

Marugame Seimen, Japan

“Although we have been promoting rationalisation and cost reduction throughout the company, it is extremely difficult to absorb cost increases through corporate efforts alone, and we have decided that we have no choice but to implement price revisions in order to ensure a stable supply of products.

Kewpie, leading Japanese mayonnaise maker

There seems to be evidence in stock prices that the market favours action over abstinence. 

Kewpie’s shares are up 25% year on year.

(Commodity & Stock prices as at 18th May 2021)