“Food Chokepoint”: Disruptions and implications for Asia

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.

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.

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