April 23, 2024
SINGAPORE – In recent years, global food security has suffered from overlapping crises caused by conflicts, geopolitical tensions, climate change, and the Covid-19 pandemic, resulting in severe food supply disruptions.
These disruptions have been accentuated by several “food chokepoints” such as in the Red Sea where Yemen-based Houthi fighters have attacked merchant ships and caused uncertainty in food shipments via the Suez Canal. The shipping traffic through the Panama Canal has decreased due to drought which also hit river transportation systems such as the Mississippi River and the Rhine River.
As the global food system is already increasingly dependent on the movement of food
from a few major “breadbasket” exporting regions to food-deficit areas around the
world – often through these “food chokepoints” – the reliance on specific shipping
routes intensifies the pressure on global food security. It also impacts agricultural
product competitiveness, delivery schedules, as well as food availability and prices.
Longer shipping durations also put perishable foods at risk, while shipping disruptions
such as changes to shipping schedules strain cargo handling and road transport
sectors, causing major delays.
What this Means for Asia
For both food-exporting and importing countries, challenges loom. Exporting countries
may face profit margin pressures, which reduce the prices for producers while
importing countries grapple with potential increases in transportation costs, which lead
to higher food prices, greater price volatility, and altered consumption patterns.
Southeast Asia, East Asia, and South Asia face heightened vulnerability due to their
reliance on European and Black Sea markets for key agricultural products and fertilisers.
Import disruptions pose inflation risks, contributing to a cost-of-living crisis. In countries
already grappling with crises like extreme weather (Pakistan), conflict (Bangladesh
and Myanmar), economic turmoil (Sri Lanka), and political uncertainties (Thailand),
food price inflation exacerbates poverty, stalling socioeconomic growth.
The most impacted – the lower-income and middle-income households – may also face
heightened malnutrition risks, threatening to reverse decades of development
progress in Asia.
Implications of Trade Disruptions
The US announced plans in late December 2023 for a task force to counter the Houthi
attacks in the Red Sea but immediate relief for trade disruptions and food price inflation
is unlikely. Continued supply chain disruptions coupled with escalating geopolitical
tensions, raise concerns about food and fertiliser supplies being weaponised, as
exemplified in the Ukraine-Russia war.
Amid recurrent crises, urgent reforms to food systems are essential. Governments and
policymakers must prioritise preparedness and resilience-building at national and
regional levels to address food security issues and mitigate future impacts.
For the many net food importing countries in Asia, aside from increasing national
stockpiles, governments and policymakers should diversify sources to mitigate supply
chain disruptions. A good example is Singapore, which, while importing over 90 per
cent of its food, has reduced vulnerability to food price and supply fluctuations through
contact with more than 180 countries and regions.
This strategy has been largely successful, resulting in Singapore enjoying the world’s
second most affordable food, behind Australia. The average Singaporean household
spends less than 10 per cent of monthly expenses on food, in contrast with the
Philippines’ 38 per cent. Additionally, the Philippines, which has a large food deficit,
ranks low in affordability, importing nearly 80 per cent of its agricultural imports. Food
inflation in the Philippines reached 8 per cent in 2023.
As the global food system is already increasingly dependent on the movement of food from a few major “breadbasket” exporting regions to food-deficit areas around the world, the reliance on specific shipping routes intensifies the pressure on global food security. PHOTO: UNSPLASH
Facilitating Food Access
Nationally, governments must implement early action plans and bolster social safety
nets to ease the burden of the cost-of-living crisis. Initiatives like food relief, cash
support, and food voucher programmes for lower-income households can help
alleviate the burden. Subsidies and tax measures, which can provide temporary relief,
may also be considered.
With average households spending over a third of their income on food in countries
like the Philippines, and lower-income households in countries like Indonesia spending
up to 64 per cent on food monthly, addressing food price inflation is crucial to
safeguard average and lower-income households from undernutrition.
Increasing Intra-regional Food Trade
To address the interconnected issues of food availability, access, and affordability,
Asian governments reliant on food imports could sign agreements with agricultural
exporting countries in the region such as grain and oilseed powerhouses Australia and
New Zealand. Doing so can avoid risks posed by chokepoints.
Greater focus on intra-regional trading could also be encouraged, such as in
Southeast Asia, which has large exporters of key agricultural products including rice
(Vietnam and Thailand) and palm oil (Malaysia and Indonesia). Increased intra-
regional trade could reduce regional food import dependency while also increasing
regional food accessibility, market stability, and economic development.
This could be supported by initiatives to encourage investments in agricultural
research and development in the region to boost the production of other staples (such
as wheat) and reduce reliance on imports.
Looking Ahead
For Asian governments and policymakers, the ongoing supply chain disruptions in the
Middle East are a reminder of the importance of resilient national and regional food
supplies and agrifood systems. Amid continuing food price inflation and malnutrition,
countries must seek to address these interlinked concerns at national and regional
levels in both the short and long term.
By implementing policy measures such as food
import diversification and strengthening social safety nets, the region has a better
chance of bracing itself for the food security challenges ahead.
Genevieve Donnellon-May is a Research Associate at the Asia Society Policy Institute, Melbourne, Australia.
Paul Teng is an Adjunct Senior Fellow at the Centre for Non-Traditional Security Studies (NTS Centre), S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore.
This commentary first appeared on the RSIS’ website and was contributed to Asia News Network.