This project aims to provide an analysis of disruption risks in global food trade and develop recommendations for preventative and responsive action.
Ensuring the provision of sufficient, affordable food for populations has become a strategic priority for food importing countries in the wake of the 2008 food price crisis and subsequent international price spikes in 2011 and 2012. The apparent fragility of international markets means many governments are now considering and planning for worst case scenarios in which trade is significantly disrupted and food availability is rapidly curtailed. As such, governments are increasingly concerned with managing price risk (relating to volatility in the price of food) and supply risk (relating to uncertainty in the availability of food at any price). Identifying appropriate strategies in terms of trade, storage and production requires an understanding of the vulnerability of global food trade to disruption.
Price and supply risks are also important for the private sector. The global disaggregation of food supply chains and just-in-time business models with low inventories mean that companies – such as supermarkets, food and beverage companies, global traders and aggregators and the financial institutions that underwrite risks and finance trade – are exposed to unforeseen disruptions or cancellation of supply contracts.
Whilst considerable research and efforts have been dedicated to understanding disruption risks in global energy markets, no comparable analysis has been undertaken for agricultural commodities.
This project will identify those supply chains and trade routes that are most vulnerable to a range of disruptive risks. The research will address maritime, logistical, production and political pinch points that are vulnerable to obstruction or closure – owing to extreme weather events, political unrest, or security threats – and will explore the degree of risk faced by key supply nodes, major export and import hubs, and maritime trade routes. Through an exploration of the first- and second-order impacts of likely responses to these risks – at local, regional, and global level – the project will seek to inform preventative action and risk management systems amongst international governance institutions, governments, and businesses operating along the value chain.
This project is currently funded by the MAVA Foundation.