One aspect of our country as an island nation that seemingly continues to go unnoticed, but is of paramount critical importance, is its dependency on imported food and other essentials.
Currently, Malta imports approximately 80% of its food requirements, both fresh and frozen. With its limited shelf life, fresh produce demands swift delivery, which places a significant spotlight on the robustness of Malta’s supply chain. So, what is the current status of this supply chain, and what risks does it face?
[attach id=1364784 size="medium" align="right" type="image"]David Fleri Soler[/attach]
Supply chain realities
Malta’s lifeline to its food supply includes daily connections from Sicily and thrice-weekly shipments from north Italian ports, provided by a handful of ferry operators. While this network serves the nation well, the cost of maintaining this supply chain has been on the rise, and with it, the risks incurred given that this supply chain is operated by only two ferry operators.
Transport costs have soared due to various factors, including escalating fuel prices caused by geopolitical events like the Ukraine war and inflation. Such cost escalations can ripple down to affect the consumer’s pocket.
But it’s not just about the cost. Malta’s island status has inherent disadvantages when it comes to logistics. The added expense of ferry costs and port dues means Maltese consumers pay more compared to their mainland European counterparts. This becomes even more pronounced when we consider nearby Mediterranean islands like Sicily, Sardinia, Corsica, or Crete. These islands benefit from EU regional funding in transport, significantly reducing their logistical burdens.
For instance, Sicily alone receives a substantial €3.2 billion in regional funds from the EU to support its transport infrastructure. Additionally, the Italian government supports shipping companies through initiatives like “Marebonus,” with the 2023 budget reaching €50 million, encompassing Marebonus and Ferrobonus, covering train transport, road and ferry connections.
The need for resilience
Malta faces unique geographical challenges as an island nation that underscore the need for a robust and healthy logistics system to ensure a constant flow of essential provisions. However, Malta doesn’t operate on a level playing field compared to its island region neighbours, and this lack of subsidy affects the prices of goods and services for its citizens.
In light of these challenges, Malta must explore measures that not only fortify its resilience against future disruptions but also allow us to remain competitive.
As a Chamber, we are actively collaborating with Ireland and Cyprus at the EU level, advocating equal recognition as other island regions. If successful, this could lead to substantial reductions in transportation costs, potentially resulting in savings for consumers as well as relief in the battle against inflation.
Malta’s dependence on imported food is a critical issue that should not be overlooked. The nation’s supply chain faces real challenges, from the escalating cost of transport to the inherent logistical disadvantages of being an island nation. However, Malta is actively working to level the playing field through EU engagement, aiming to secure benefits that could lead to lower costs for consumers and greater resilience in the face of unforeseen disruptions.
One thing remains clear: Malta’s food supply situation is not just an economic issue; it’s a matter of national importance, impacting the daily lives of its citizens. The lessons learned from the recent pandemic underscore the need for a robust and secure food supply, even in the face of uncertainty. Malta’s journey to address these challenges continues, and the nation’s resilience and determination remain unwavering.
David Fleri Soler is Chair of Logistics and Supply Chain Section, Malta Chamber