Chokepoints and Vulnerabilities in Global Food Trade

Report
from Chatham House
Published on 27 Jun 2017 View Original

Executive Summary

Global food security is underpinned by trade in a few crops and fertilizers. Just three crops – maize, wheat and rice – account for around 60 per cent of global food energy intake. A fourth crop, soybean, is the world’s largest source of animal protein feed, accounting for 65 per cent of global protein feed supply. Each year, the world’s transport system moves enough maize, wheat, rice and soybean to feed approximately 2.8 billion people. Meanwhile, the 180 million tonnes of fertilizers applied to farmland annually play a vital role in helping us grow enough wheat, rice and maize to sustain our expanding populations. International trade in these commodities is growing, increasing pressure on a small number of ‘chokepoints’ – critical junctures on transport routes through which exceptional volumes of trade pass. Three principal kinds of chokepoint are critical to global food security: maritime straits along shipping lanes; coastal infrastructure in major crop-exporting regions; and inland transport infrastructure in major exporting regions.

A serious interruption at one or more of these chokepoints could conceivably lead to supply shortfalls and price spikes, with systemic consequences that could reach beyond food markets. More commonplace disruptions may not in themselves trigger crises, but can add to delays, spoilage and transport costs, constraining market responsiveness and contributing to higher prices and increased volatility.

The chokepoints on which global food security depends

This report offers a first-of-its-kind analysis of chokepoints in the global food system, combining trade data from the Chatham House Resource Trade Database (https://resourcetrade.earth) with a purpose-built model to map bilateral commodity flows on to trade routes. It identifies 14 chokepoints that are critical to global food security. These are indicated in Figure 1.

Among the maritime chokepoints, the Panama Canal and Strait of Malacca see the most significant grain throughput due to their positions linking Western and Asian markets. Over one-quarter of global soybean exports transit the Strait of Malacca, primarily to meet animal feed demand in China and Southeast Asia. The Turkish Straits are particularly critical for wheat – a fifth of global exports pass through them each year, largely from the Black Sea ‘breadbasket’ region.

The most important inland and coastal chokepoints lie in the US, Brazil and the Black Sea, which account for 53 per cent of global exports of wheat, rice, maize and soybean. Inland waterways carry about 60 per cent of US exports of the four crops (which account for 13 per cent of worldwide exports) to the sea, primarily to the Gulf Coast ports. In Brazil, four ports on the southeastern coastline are responsible for nearly a quarter of global soybean exports; these ports in turn depend on the roads linking them to the huge farms in the country’s interior. Around 60 per cent of Russian and Ukrainian wheat exports (12 per cent of the global total, and growing fast) depend on rail to reach the Black Sea.

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