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In recent years, global food security has suffered from overlapping crises due to conflicts, geopolitical tensions, climate change and the Covid-19 pandemic, leading to severe food supply disruptions.
These disruptions are exacerbated by a number of “food chokepoints” such as the Red Sea, where Yemen-based Houthi militants have attacked merchant ships and disrupted food shipments through the Suez Canal. Shipping traffic through the Panama Canal has been reduced due to drought, which has also affected river systems such as the Mississippi and Rhine.
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As the global food system increasingly relies on the movement of food from a few large “bread basket” exporting regions to food-deficient regions around the world – often via these “food chokepoints” – this dependence on specific transport routes adds further pressure to global food security.
It also impacts the competitiveness of agricultural products, delivery schedules, and the availability and pricing of food. Longer transit times also put perishable foods at risk, while disruptions to transportation such as changes to shipping schedules put a strain on the freight handling and trucking sectors, causing major delays.
Impact on Asia
For both food exporting and importing countries, challenges are looming. Exporting countries may face margin pressure, reducing prices for producers, while importing countries grapple with the possibility of higher transportation costs, leading to higher food prices, greater price volatility and changing consumption patterns.
Southeast Asia, East Asia and South Asia face increasing vulnerability due to their dependence on European and Black Sea markets for key agricultural products and fertilizers. Import disruptions pose inflation risks, contributing to a cost-of-living crisis.
Impact of trade disruption
The US announced plans in late December 2023 for a task force to counter Houthi attacks in the Red Sea, but it is unlikely to immediately address trade disruptions and food price inflation. Continued disruptions to supply chains, coupled with escalating geopolitical tensions, have raised concerns about weaponized food and fertilizer supplies.
In the face of recurring crises, urgent reform of food systems is urgently needed. Governments and policymakers must prioritize preparedness and resilience building at the national and regional levels to address food security issues and mitigate future impacts.
For many net food importers in Asia, in addition to building national reserves, governments and policymakers should diversify their sources of supply to minimize supply chain disruptions. A prime example is Singapore, which, despite importing more than 90% of its food, has reduced its vulnerability to food price and supply fluctuations by connecting with more than 180 countries and regions.
The strategy has largely been successful, with Singapore enjoying the second most affordable food in the world, after Australia. The average Singaporean household spends less than 10% of its monthly expenses on food, compared to 38% in the Philippines. In addition, the Philippines, a country with a large food deficit, has low affordability, importing nearly 80% of its agricultural imports. Food inflation in the Philippines is expected to reach 8% by 2023.
Facilitate access to food
Nationwide, governments must implement early action plans and strengthen social safety nets to ease the burden of the cost-of-living crisis. Initiatives such as food relief, cash transfers, and food stamp programs for low-income households can help ease the burden.
Subsidies and tax measures that could provide temporary relief could also be considered. With average households spending more than a third of their income on food in countries like the Philippines, and low-income households in countries like Indonesia spending up to 64% on food each month, addressing food price inflation is crucial to protecting middle- and lower-income households from malnutrition.
To address issues related to food supply, access and affordability, Asian governments dependent on food imports could sign agreements with regional agricultural exporters such as grain and oilseed powerhouses Australia and New Zealand. Doing so could avoid the risks posed by choke points.
A greater focus on intra-regional trade could also be encouraged, for example in Southeast Asia, where there are major exporters of important agricultural products including rice (Vietnam and Thailand) and palm oil (Malaysia and Indonesia). Increased intra-regional trade could reduce regional reliance on food imports while increasing regional food access, market stability and economic development. This could be supported by initiatives to encourage investment in regional agricultural research and development to boost production of other staples (such as wheat) and reduce reliance on imports.
Looking forward
For Asian governments and policymakers, the ongoing supply chain disruptions in the Middle East are a reminder of the importance of national and regional food supplies and agri-food systems.
As food price inflation and malnutrition continue to rise, countries must find ways to address these interconnected concerns at the national and regional levels in both the short and long term. By implementing policy measures such as diversifying food imports and strengthening social safety nets, the region is better prepared for the food security challenges ahead.
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