‘Chokepoints’ in the Global Food Trade: Five Things You Should Know
(1) There are 14 major chokepoints that are critical to global food security: eight are maritime, three are coastal and three are inland.
Key maritime chokepoints include the Panama Canal, the Strait of Gibraltar, the Turkish Straits, the Suez Canal, the Straits of Malacca and the Strait of Dover; key inland chokepoints include US waterways and rail networks, Brazil’s inland road network and the Black Sea rail network; and key coastal chokepoints include Black Sea ports, US Gulf Coast ports and Brazil’s Southern ports.
(2) There are four key commodities — wheat, rice, maize and soybean — that provide around two-thirds of the world’s harvested crop calories.
Global food security is underpinned by trade in a few crops and fertilizers. Just three crops — maize, wheat and rice — account for around 60 per cent of food energy intake worldwide. A fourth crop — soybean — is the world’s largest source of animal protein feed accounting for 65 per cent of international protein feed supply, and over a quarter of soybean exports transit through the chokepoint of the Straits of Malacca alone every year.
(3) The US, Brazil, as well as Russia and Ukraine, are among the top 10 exporters of these key commodities but have congested and degrading infrastructure that puts their exports at risk.
The US is one of world’s most important breadbaskets and exports 30 per cent of the world’s maize supply in addition to 29 per cent soy, 13 per cent wheat and 8 per cent rice. However, their waterways are heavily congested and over half of the locks and dams that enable navigation are over 50 years old. Furthermore, the Gulf coast ports in particular are vulnerable to sea-level rise.
Brazil is the largest exporter of soy globally however its road network is extensive but only 12 per cent is paved and 6 per cent is in a good state of repair.
Russia and Ukraine together account for 19 per cent of global wheat exports — of which between 60 and 65 per cent of these are transported to the Black Sea ports by rail. The Black Sea region also has an extensive rail network but it is in a bad state of repair while poor quality handling facilities and ageing loading equipment at ports cause extensive delays and high transport costs.
(4) Countries at risk vary but low-income countries are largely more at risk than high-income countries.
The criticality of a chokepoint to a particular importing country depends not only on the share of imports that pass through it but on whether there is an alternative route available.
Low-income net-food importers in sub-Saharan Africa — including Uganda, Ethiopia, Kenya, Tanzania and Sudan — are particularly at risk.
The Middle East and North Africa region is the most food-import dependent in the world and is exposed to a high degree of chokepoint risk — it relies heavily on wheat shipments from Russia that must transit the Turkish Straits and, in the case of the countries of the Arabian Peninsula, must then be shipped through the Suez Canal, Strait of Bab al-Mandab and Strait of Hormuz.
In contrast, Japan and South Korea, though rich countries, rank among the most exposed in the world — just under three quarters of all Japanese maize and wheat imports pass through the Panama Canal.
However, although China is a huge net-importer of grain and depends on the Panama Canal and Strait of Malacca for 34 per cent and 42 per cent of its soy imports respectively, it has been the most proactive in managing its exposure to chokepoint risk, investing in transport routes and trade infrastructure in Asia and around the world.
(5) There are three major trends that are affecting chokepoint risks: increased trade, climate change and under-investment in infrastructure.
Firstly, dependency on chokepoints is growing, for example, over the past 15 years, the share of internationally traded grain and fertilizers passing through at least one of the maritime chokepoints have increased from 43 to 54 per cent, while 10 per cent now depends on transit through one or more of the maritime chokepoints as the only viable shipping route. Growing international trade means that chokepoint dependency is likely to increase for the foreseeable future and some chokepoints will come under more pressure than others.
Secondly, climate change is increasing the threat of disruption by acting as a hazard multiplier across all three categories of chokepoints. It will increase the frequency and severity of extreme weather, leading to more regular closures of chokepoints and greater wear and tear on infrastructure. Rising sea levels will particularly threaten the integrity of port operations and coastal storage infrastructure. Climate change is also expected to aggravate drivers of conflict and instability and lead to more frequent harvest failures, increasing the risk of governments imposing arbitrary export controls.
Lastly, chronic underinvestment in infrastructure is creating a double deficit — of capacity with respect to growing trade volumes and of resilience with respect to climate change.
Countries and regions must mobilize significant investment over the coming decades to prevent bottlenecks worsening across the global food trade.