The world’s food security is increasingly reliant on a small number of global trade chokepoints which are exposed to disruptive hazards, a new Chatham House report has found. The UK-based think-tank has identified 14 trade chokepoints of global strategic importance – maritime straits, major port hubs and inland transport networks – through which over half of all internationally traded grain must pass. “A serious interruption at one or more of these chokepoints could lead to supply shortfalls and price spikes,” they warn. More commonplace disruptions may not in themselves trigger crises, but could add to delays, spoilage and transport costs, contributing to higher prices and increased volatility. “We are talking about a huge share of global supply that could be delayed or stopped for a significant period of time,” co-author Laura Wellesley was quoted by The Guardian. “What is concerning is that, with climate change, we are very likely to see one or more of these chokepoint disruptions coincide with a harvest failure, and that’s when things start to get serious.”

The report points out that international trade in food and agricultural inputs relies on a global web of transport systems. A complex network of railways, waterways, ports, sea lanes and storage infrastructure supports the movement of crops and fertilizers from farm or factory to port and from region to region. The most important inland and coastal chokepoints lie in a few ‘breadbasket’ regions. The US, Brazil and the Black Sea account for 53% of global exports of wheat, rice, maize and soybean. Inland waterways carry about 60% of US exports of the four crops (which make up 13% of global exports) to the sea, primarily to the Gulf Coast ports. In Brazil, four ports are responsible for a quarter of global soybean exports. Around 60% of Russian and Ukrainian wheat exports depend on rail to reach the Black Sea. 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. Chatham House warns that supply chains are only as reliable as their weakest links, and the most critical parts of the global transport network are these junctures.

The report explores three categories of disruptive hazards: First, extreme whether events, including storms or floods, may temporarily cause the closure of chokepoints. Second, security and conflict may arise from war, political instability, piracy, organized crime and terrorism. Third, political intervention and institutional failure may cause disruptions, such as a decision by authorities to close a chokepoint or restrict the passage of food. Almost all major chokepoints had seen a closure or interruption at least once in the past 15 years. In June 2017, overland routes that carry 40% of Qatar’s food imports were closed as part of a blockade. The report says that the risks are increasing as dependency on chokepoints is growing, especially among food-deficit countries which rely on imports. Over the past 15 years, the share of internationally traded grain and fertilizers passing through at least one of the maritime chokepoints has increased from 43 to 54%. A share of 10% now depends on transit through one or more of the maritime chokepoints as the only viable shipping route. Climate change adds to the pressure by increasing the frequency and severity of extreme weather and by threatening the integrity of port operations and coastal storage infrastructure due to rising sea levels. Chronic underinvestment in infrastructure is also a major problem. The US’s inland waterways are old, congested, and vulnerable to drought and flood while Brazil’s roads are poor and often rendered impassable by rain.

Chatham says that chokepoints are systematically overlooked in assessments of food security despite their importance to food prices and supply. The report offers a set of recommendations and risk mitigation strategies to be put in place. Governments should diversify production and global grain supply chains; invest in infrastructure that is climate resilient and cooperate with other governments to develop regional strategic reserves and storage infrastructure. The authors also call on developed food-exporting countries to reform trade-distorting farm support. “Such support promotes systemic reliance on a handful of mega-crops and a small number of grain-exporting regions. Instead, public funds should be directed to supporting alternative sources of grain production around the world, in order to diversify global production and reduce import dependence elsewhere.” (ab)