Chatham House report
Published 27 June 2017
Updated 18 May 2023
ISBN: 978 1 78413 230 9
Pedro Miguel locks along the Panama Canal. Photo: Gonzalo Azumendi via Getty Images.
Policymakers must take action immediately to mitigate the risk of severe disruption at certain ports, maritime straits, and inland transport routes, which could have devastating knock-on effects for global food security.
Adding a ‘chokepoint risk’ perspective to conventional analyses of food security can reveal new insights. In this chapter we use the Chatham House Food Security Dashboard (CH-FSD) to identify countries particularly exposed to chokepoint disruptions; and to examine how chokepoint exposure may exacerbate food insecurity in countries with high levels of vulnerability. Details of the CH-FSD and its methodology are given in Annex 1.
A common conceptual framework describes risk as the product of a hazard probability distribution, pre-existing levels of exposure (the amount of economic, social or environmental assets that could be affected), and vulnerability (the propensity to be adversely affected):
Risk = Hazard (frequency; severity) x Exposure x Vulnerability
Applying this framework to national food security, we can understand chokepoint risk as the interaction of three factors: disruptive hazards (weather and climate, security and conflict, political and institutional – discussed in the previous chapter) at a particular chokepoint; the degree of exposure to chokepoint disruption (the share of national consumption accounted for by imports passing through the chokepoint or chokepoints in question); and vulnerability (to resultant supply interruptions or price spikes). With respect to the eight maritime chokepoints, the CH-FSD applies this framework to 205 countries using indicators of national exposure and vulnerability (see Box 10).
In order to assess national levels of exposure and vulnerability to chokepoint disruptions, we have incorporated the quantitative assessment of chokepoint reliance made possible by the Chatham House Maritime Analysis Tool (CH-MAT) with a new multi-indicator food security assessment tool: the Chatham House Food Security Dashboard (CH-FSD). The CH-FSD provides a framework with which to combine existing measures of food insecurity with a new understanding of chokepoint risk. It assesses countries’ chokepoint risk in terms of their exposure (at national level) and vulnerability (at national level and at household level) to chokepoint disruption (see Table 3).
|
Dimension |
Domain |
Indicator |
|
Exposure |
Trade dependence |
Cereal import dependency ratio (%) |
|
Chokepoint reliance |
Aggregate maize, wheat, rice and soybean imports passing through at least one maritime chokepoint (% by weight) |
|
|
Aggregate maize, wheat, rice and soybean imports passing through a critical maritime chokepoint (% by weight) |
||
|
Vulnerability |
Food insecurity |
Household income spent on in-home food consumption (%) |
|
Prevalence of undernourishment (%) |
||
|
Food availability |
Aggregate stock-to-use ratio for maize, wheat, rice and soybean (%) |
|
|
Average dietary energy supply adequacy (%) |
||
|
State fragility |
Fragile state? (Y/N) |
|
|
Political stability and absence of violence/terrorism. Composite indicator (approx. -2.5 to 2.5, mean=0, higher values correspond to better governance) |
||
|
Infrastructure quality |
Existence of adequate crop storage facilities? (Y/N) |
|
|
Road infrastructure quality (1–7, 1=worst, 7=best) |
||
|
Rail infrastructure quality (1–7, 1=worst, 7=best) |
||
|
Port infrastructure quality (1–7, 1=worst, 7=best) |
||
|
Climate vulnerability |
People killed/affected by floods, storms, droughts (per 100,000 people – worst year and annual average, 2005–14) |
|
|
Total economic damage caused by floods, storms, droughts (% of GDP – worst year and annual average, 2005–14) |
||
|
Social protection |
Social protection coverage for poorest quintile (%) |
|
|
Macroeconomic vulnerability |
Cash surplus/deficit (% of GDP) |
|
|
Value of food imports in total merchandise exports (%) |
A full methodology can be found in Annex 1.
The share of national food consumption transported through chokepoints constitutes a country’s exposure to maritime chokepoint disruption. Exposure is a function of both the degree to which national food supply or prices depend on international markets, and the extent to which food imports transit particular trade routes. This section examines the exposure of different import-dependent countries to chokepoints.258
Import dependence does not necessarily imply a high degree of direct exposure to chokepoint disruption
Broadly speaking, a high degree of dependence on food imports (including food aid) and imported inputs such as fertilizers and feed signals greater exposure to international food price shocks and to supply shocks along international supply chains.259 That said, import dependence does not necessarily imply a high degree of direct exposure to chokepoint disruption if imports do not rely on key chokepoints (there may still be indirect chokepoint risk – the interconnectedness of international markets means that a supply stoppage in a major crop-growing region could, for example, affect food prices in a given country even if that country is not importing from the producer in question).
Equally, where a significant share of imported food relies on chokepoints but the share of imported food in overall supply is relatively low, or imports of the affected commodity are minimal, the impact of a chokepoint disruption will likely be muted.
But where import and chokepoint dependence are both high, so then is exposure to chokepoint disruption.
Table 4 shows 20 of the countries most exposed to maritime chokepoint risk according to the CH-FSD. These nations are highly food import-dependent. They receive over half of their maize, wheat, rice and soybean imports via at least one maritime chokepoint.
The prevalence of GCC countries is immediately obvious: these countries import high proportions of their food and rely heavily on the Arabian maritime chokepoints for delivery of those imports.
The GCC countries import high proportions of their food and rely heavily on the Arabian maritime chokepoints for delivery of those imports
Consider wheat (see Figure 21). Kuwait receives virtually all of its wheat imports via the Strait of Hormuz (as does Bahrain). For Qatar 80 per cent of imports must transit the strait. The United Arab Emirates (UAE) depends on the strait for 88 per cent of its wheat imports. This reliance has lessened since a new grain import and re-export hub at Fujairah, on the Gulf of Oman coast, started operations.260 Nonetheless, the fact that there is no alternative maritime route into the Persian Gulf heightens risk for Kuwait, Bahrain, the UAE and Qatar.261
The wider MENA region also features prominently on the list of countries most exposed to maritime chokepoint disruption, with Jordan, Israel, Libya, Lebanon, Algeria, Iraq and Tunisia all making the top 20. The established link between food insecurity and conflict in the region262 means that this extent of exposure to maritime chokepoints – in particular, to the Arabian chokepoints, where security hazards are likely to be co-dependent – is of concern.
The number of wealthy countries on the list is also notable. Three of the world’s biggest 20 economies by GDP – Japan, South Korea and Saudi Arabia263 – feature on it. So do the high-income countries of Brunei, Oman, Cyprus and – as mentioned – Israel, Kuwait and the UAE. Conventional economic analyses of national food security tend to assume that rich countries are food-secure irrespective of their import dependency, because wealth makes them resilient to international price rises. The implicit assumption is that markets will continue to function in the worst-case scenario; however, it is clear that high degrees of chokepoint exposure mean that some wealthy countries cannot necessarily count on uninterrupted access to markets and need to consider the risk of import dislocations arising from chokepoint disruption.
Most troubling among the list of highly exposed markets is the presence of a handful of low-income countries: Djibouti, Eritrea and Yemen
South Korea, for example, is dependent on imports for three-quarters of its cereal supply. Four-fifths of this imported supply transits at least one maritime chokepoint. In all, around 60 per cent of the country’s maize and soybean imports pass through the Panama Canal; and roughly a third of South Korea’s maize imports and just over a third of its wheat imports must pass through no fewer than three chokepoints en route from Eastern Europe, as they transit the Suez Canal, the Strait of Bab al-Mandab and the Strait of Malacca in succession (see Figure 22).
Most troubling among the list of highly exposed markets is the presence of a handful of low-income food-deficit countries: Djibouti, Eritrea and Yemen. As the CH-FSD reveals, these countries are highly vulnerable to international food market instability. For example, in Yemen over a quarter of the population is undernourished, nearly half of all household income is spent on food, stock levels of staple crops are very low, and social protection measures for the country’s poorest people are far short of adequate. Yemen is an extremely fragile country, destabilized by ongoing war that has had a ruinous impact on infrastructure. At the time of writing, the country was on the brink of famine. With a dependence on imports for four-fifths of its cereal supply, and with half of these shipments passing through chokepoints, Yemeni food consumption is at high risk from supply interruptions, as has happened in recent months due to the Saudi-led coalition’s naval blockade of the country.
As discussed in Chapter 2, Chinese imports of strategic commodities, particularly soybean, have been growing, and so has its dependency on the Strait of Malacca and Panama Canal. Despite this, China’s maritime chokepoint exposure remains relatively low: its policy of self-sufficiency in cereals means that it has only small trade deficits in wheat and maize, although rising demand on the one hand and soil depletion, water scarcity and an ageing rural workforce on the other mean that these deficits may gradually widen.264
China has maintained self-sufficiency in cereals by increasing its imports of foodstuffs that compete for land – in particular oilseeds. In 2015, Chinese imports accounted for nearly 40 per cent of the global trade in soybean.265 This import dependence is expected to rise: in 2000, the country’s net annual soybean imports were 10 million tonnes; by 2025, this figure is projected to reach 106 million tonnes.266 Just under 90 per cent of China’s grain and fertilizer imports can be expected to pass through the Strait of Malacca or the Panama Canal. Yet with improving levels of food security (only 9 per cent of the population is undernourished, and less than a fifth of household income is spent on food), and with the majority of agricultural imports being fed to livestock rather than humans, China is relatively resilient to a chokepoint hazard directly affecting its population’s caloric needs. Nevertheless, as will be explored in the next chapter, China is acutely aware of this (limited) exposure and is actively seeking to reduce it.
As the discussion of Yemen illustrates, exposure to chokepoint disruption poses a more serious threat to food security in countries in which vulnerability is high. It is therefore important to pay particular attention to the chokepoint risks of the most vulnerable countries.
Table 5 shows vulnerability indicators from the CH-FSD for the most vulnerable countries according to traditional measures of food insecurity. More than a quarter of the population in these countries is chronically undernourished, and on average households spend more than a quarter of their income on food. Selected other food-insecure countries with significant chokepoint exposure are also shown. For vulnerable countries, even a relatively small chokepoint shock may result in disproportionately large impacts.
What is immediately obvious, and unsurprising, is the prevalence of sub-Saharan African countries in the list of highly vulnerable countries. Although some have relatively modest exposure to chokepoints, many countries – notably Burundi, Djibouti, Ethiopia, Kenya, Liberia, Mozambique, Rwanda, Sudan, Tanzania and Uganda – rely on maritime chokepoints for 50 per cent or more of their grain imports.
One region of sub-Saharan Africa with high levels of vulnerability and material exposure is East Africa. East African wheat imports are particularly exposed: between 69 per cent (in the case of Tanzania) and 92 per cent (in the case of Uganda) transit the Suez Canal and the Strait of Bab al-Mandab. Large shares of these imports are sourced from Russia. In 2013, 22 per cent of wheat imports into Rwanda, 21 per cent of wheat imports into Uganda, 20 per cent of wheat imports into Tanzania and 30 per cent of wheat imports into Kenya originated in Russia (shares equivalent to 24 per cent, 16 per cent, 20 per cent and 17 per cent of domestic wheat consumption respectively).267 And dependence on Russia is increasing: by 2015, Russia’s share of imports into Rwanda, Uganda and Tanzania had risen to 59 per cent, 42 per cent and 40 per cent respectively. Populations in East Africa are thus exposed to the risk not only of a major disruption to the Arabian maritime chokepoints, but of delays or supply cancellations along Russian railways, at Russian ports, or through the Turkish Straits.
Of particular concern is the degree of chokepoint exposure of countries in the Horn of Africa, already one of the most food-insecure regions in the world. Countries in this region typically have high structural vulnerability, with high levels of malnutrition, high levels of household spending on food, and very high government spending on food imports as a proportion of foreign exchange reserves. The region is acutely vulnerable to climate impacts and has high levels of state fragility. At the time of writing a major food crisis had engulfed the region, with famine declared in South Sudan and possible in Somalia.268 Food aid delivered by the World Food Programme (WFP) is a critical source of supply in such circumstances. But the WFP relies on shipping for over half of its food aid deliveries.269 The port at Djibouti is particularly important, handling 86 per cent of deliveries destined for Ethiopia and hosting the WFP’s regional storage and logistical hub.270 To arrive at Djibouti port, 99 per cent, 98 per cent, 86 per cent and 35 per cent of international wheat shipments into Eritrea, Djibouti, Ethiopia and Somalia respectively must pass through the Suez Canal (see Figure 23). Were this supply artery to be closed off, prospects for distributing essential food supplies to affected communities would be severely limited.
Food aid delivered by the World Food Programme (WFP) is a critical source of supply. But the WFP relies on shipping for over half of its food aid deliveries
The absence at national or regional level of robust and secure transport networks to connect food-insecure communities with available stocks, local markets or food aid distribution centres also heightens these countries’ vulnerability to chokepoint disruption.
Vulnerability is high among the low-income food-deficit countries
Vulnerability is also high among the low-income food-deficit countries (LIFDCs, see Table 6).271 Of the 54 countries classified by the UN Food and Agriculture Organization (FAO) as LIFDCs, 35 are also designated as fragile states by the OECD; all bar five are in the bottom half of countries in terms of their scores for the World Bank’s measure of political stability and absence of violence or terrorism.272 Undernourishment is widespread in many (though by no means all) of these countries, and households typically spend a high proportion of their income on food. Food availability, as defined by caloric supply and stock-to-use ratios for staple foods, is insufficient. Social protection coverage for the poorest segments of the population is also typically inadequate in LIFDCs (Lesotho, Mongolia and Uganda being notable exceptions). Transport infrastructure is a widespread weakness, although more than half of those countries for which data are available do have adequate crop storage facilities. Thus, access to and distribution of sufficient food stocks are key challenges for the vast majority of these countries.
Even if their exposure to maritime chokepoints is low, LIFDCs are still exposed to inland and coastal chokepoints in major crop-producing regions. This exposure can be direct, in that they import from one or more producer regions; or indirect, in that a major disruption at a chokepoint in one of these regions could affect international prices, and therefore import costs, whether or not that region is a source of imports. In fact, many LIFDCs are directly reliant on breadbasket regions, particularly the Black Sea, for their imports (see Figure 24).
An assessment of national exposure to chokepoint disruption brings a new dimension to comparative degrees of food security: Japan and South Korea, two of the richest countries in the world, are among the most exposed to the interruption of food imports – on which they are highly dependent – at critical chokepoints; and China, though boasting only marginal trade deficits in wheat and maize, relies heavily on the Strait of Malacca and Panama Canal for those commodities that it imports. Above all, the inclusion of chokepoint reliance within a cross-country assessment serves to underline the vulnerability of the lowest-income food-insecure nations, particularly those in North Africa, the Middle East and sub-Saharan Africa.
In the following chapter, we consider steps that national governments and international organizations have taken to manage food supply risk, and the degree to which chokepoint risk has been addressed, before outlining priority areas for action at international and national level.
