The uninterrupted passage of staple agricultural commodities through several physical ‘chokepoints’ along international trade routes is vital to global food security. The significance of these critical transport junctures through which exceptional volumes of trade pass became abundantly clear in 2021 when one of the world’s largest container ships ran aground in one of the busiest shipping channels. The Suez Canal, through which nearly 19,000 vessels passed in 2019, was blocked for six days while the 400-metre and 220,000-tonne Ever Given was re-floated. An estimated $9.6 billion of trade via the canal was held up on each day of the blockage.
Despite causing enormous disruption, adding to the strain already placed on global shipping supply chains due to the COVID-19 pandemic, the interruption was fortunately relatively short-lived. Around 15 per cent of global grain trade passes through the Suez Canal. Had the interruption lasted longer, the impacts on many countries’ food security could have been much worse – both for those with directly affected import orders and more generally as disruptions are reflected in international market prices.
Unfortunately, worst-case impacts now appear to be materializing behind another chokepoint as a result of the Russian invasion of Ukraine. The ports of the Black Sea are vital for getting produce from a major global ‘breadbasket’ region to the rest of the world. Russia and Ukraine export more than half of all globally traded sunflower oil and seeds, around one-quarter of all traded wheat and barley and around one-sixth of traded maize and rapeseed. With all of Ukraine’s Black Sea ports now closed, even if some agricultural planting and harvesting are to proceed, getting them out of the country may be impossible if the conflict continues.
Scenarios from the UN Food and Agriculture Organization (FAO) suggest that the potential gaps in supply from Ukraine and Russia could lead to an additional 8 million to 13 million people being undernourished in 2022-23. The most pronounced increases would likely occur in the Asia-Pacific followed by sub-Saharan Africa and the Near East and North Africa. While many low-income food-deficit countries are directly dependent on Black Sea exports, the impacts would fall more broadly and indirectly as a result of international food and feed prices being pushed 8 to 22 per cent higher than their elevated 2021 levels. Indeed, by February 2022 they had already reached an all-time high. This clearly illustrates how risks can rapidly cascade and multiply through global systems.
Recent events in the Suez Canal and the Black Sea illustrate the importance of chokepoints and the severe consequences that their closure or disruption cause. In total, there are 14 major maritime, coastal and inland chokepoints which the global trade in staple food commodities and fertilizers rely on (Figure 1).
Disruption to chokepoints has the potential to threaten food and nutrition security, drive market uncertainty, prompt distortive trade measures and push up global food prices. Even small-scale, localized disruptions can cascade through global supply chains and across sectors if these occur at locations of strategic importance to the continued flow of global trade. Yet international efforts to manage the risk of disruption to – or the degeneration of – these chokepoints remain largely lacking even as the risks increase.
The main risks to such chokepoints originate from a variety of direct and indirect sources that can be broadly classified as weather and climate-related, security and conflict-related and stemming from political and institutional factors. Among these, climate change is a significant risk multiplier. For example, the current chances of a one-in-100-year flood in the Indian city of Kolkata are thought to be 1,000 times more likely with a one-metre sea-level rise, with around 1,000 such events would be expected every 100 years. Climate change not only increases the frequency and severity of such direct weather shocks, which may prevent navigation through chokepoints, but it also increases the likelihood of slow-onset disruptions such as infrastructural damage from rising sea levels and increasing rates of weathering. It can also have compounding non-linear effects when interacting with other risk factors such as by aggravating drivers of conflict and instability. Equally, if the current impacts of restricted Black Sea exports persist, and coincide with a climate anomaly that has a detrimental impact on grain and oilseed harvests from the US Midwest, then food supply could become even more constrained and the risks could rapidly multiply triggering further downstream risks and insecurities.
CASCADES is an international consortium that is researching the risks of cross-border and indirect climate change impacts that could ultimately affect Europe. We have brought our understanding of global trade routes for agricultural staples and the dependence of each country’s imports and exports on the eight critical maritime chokepoints shown above1 together with project partners’ quantitative models that consider the evolution of global trade and the productivity of agricultural land2 under a range of pathways that represent different socio-economic developments and changes to the climate.3
Currently, the European Union’s (EU) imports of agricultural grains, oilseeds and fertilizers are less dependent on maritime chokepoints than imports to the world as a whole (Figure 2). EU imports accounted for 18 per cent, by value, of all global imports between 2018 and 2020 but we estimate that only 26 per cent of these transited at least one chokepoint compared with 56 per cent globally. Among the chokepoints that the EU is most exposed to are the Dover Strait and the Strait of Gibraltar for soybean imports in particular. The EU has considerable direct agency over mitigating risks to the functioning of these chokepoints as, in both cases, one of the littoral states is an EU member. In addition to those member states – France and Spain, respectively – the other littoral countries – the UK and Morocco – are also signatories to the UN Convention on the Law of the Sea (UNCLOS) which establishes the right of passage through straits for international navigation and prohibits their unilateral closure by littoral nations. Although this does not preclude risks from materializing, historically these chokepoints have also been among the most benign. The Strait of Gibraltar was the only chokepoint entirely free from disruption between 2002 and 2017 and the Dover Strait was only mildly impacted by high winds in 2016 and brief disruptions from migrant crossings and protesting French fishers. For these reasons we exclude these chokepoints and instead focus our analysis on the Turkish Straits and the Panama and Suez Canals – the next most significant chokepoints to the bloc.
The Panama Canal is of most significance to the EU for soybean trade especially the produce exported from the west coast of Latin America. However, this still only accounts for 5.4 per cent of EU soy imports since most come from the east coasts of the Americas meaning that they can transit across the Atlantic unimpeded by any potential chokepoint restrictions.
The Turkish Straits are of the most significance to the EU for the bloc’s cereal imports (11 per cent) and fertilizer imports (6 per cent) reflecting the high dependence on the Black Sea region for these commodities.
Blockages to the Suez Canal matter most in terms of cereal imports (4.7 per cent) from the east (Figure 3). Very few of the EU’s agricultural imports come from the Middle East and North African countries bordering the Red Sea. Therefore, the exposure to events in the Suez Canal is very similar to the exposure to dislocations in the Strait of Bab-al-Mandab at the southern end of the Red Sea which Suez-bound ocean freight in the Indian Ocean has to first transit via the Gulf of Aden. To simplify the analysis, however, we consider disruptions just to the Suez Canal not to the Strait of Bab-al-Mandab as well.
To understand the potential risks to the EU, we consider the impacts of plausible climate-driven or climate-exacerbated hazards affecting these three chokepoints in the future. These hazards could potentially materialize under any climate scenario since acute ‘tail’ shocks of this nature are not well reflected in long-run climate models. As the climate heats, however, the risks that such events will both occur and lead to more severe outcomes when they do increase.
As the hazard interacts with, and exacerbates, other stressors, such as climate-driven changes to the volumes and geographic distributions of agricultural harvests, or other linked climate events occurring elsewhere in the world, cascading impacts may materialize.
For this reason, the analysis is conducted in two stages. The first considers the impacts these chokepoint hazards may have if they materialize in a ‘middle-of-the-road’ (SSP2) version of 2030.4 The second looks at them materializing in 2030 or 2050 under the more challenging circumstances of increased regional rivalries (SSP3)5 or persisting fossil-fuelled development (SSP5).6 In the latter, additional expectations are incorporated on climate impacts under a climate that heats to between 2.0°C and 3.7°C above pre-industrial levels by the end of the century (RCP6.0).
Here, we report the approach and the results of the first-stage analysis which is based on recent historical (2018) chokepoint dependencies for each country while subsequent analysis will downscale the world regions in the global trade model to refine the chokepoint dependencies based on modelled values for future bilateral trade.
For each of the three chokepoints of most concern to European agricultural imports, we envisage the following set of circumstances and translate these into the proportion of trade passing through the chokepoint in a single year that may be impacted. The shocks are assumed to be static and independent of one another.7 These narratives and their quantifications should be regarded as illustrative and purely for the purposes of helping to explore the potential magnitude of impacts from a plausible series of events.
A strong El Niño event brings long periods of dry weather to Central America, causing water levels to drop in the Gatún and Miraflores lakes either side of the Panama Canal, and leading to the introduction of depth restrictions on vessels transiting the canal.
Similar El Niño-induced events occurred in 2016, which affected nearly a fifth of vessels using the canal, and in 1997–98. It is plausible to expect that a more severe event in the future may reduce water levels for longer and to a greater degree which could affect half of all vessels using the Panama Canal.
Since the largest vessels – with the largest freight capacities – would be disproportionately affected, and as canal throughput of agricultural commodities is seasonal, the proportion of produce affected could be even greater and, although many vessels would be able to continue to transit the Panama Canal, the restrictions on the amount of cargo they could carry will affect the economics of the passage.
We assume that the depth restrictions apply for six months during which 75 per cent of annual agricultural throughput occurs and that the half of vessels affected are responsible for carrying 70 per cent of all agricultural commodities. Therefore 53 per cent (0.75 x 0.7) of annual agricultural produce transiting the canal is affected.
The risks of future conflicts in the Middle East may be exacerbated by climate impacts in the region which will have continued implications for the security of the region’s chokepoints.
The wars in Syria and Yemen persist, for example, with little hope for imminent peace while Turkey, which shares borders with Syria and Iraq, has had a number of terrorist incidents over the last decade in addition to the July 2016 coup attempt which have raised concerns about stability in the region. Indeed, the coup led to the halting of traffic through the Bosphorus Strait. Although this lasted only a few hours, it threw into sharp relief the ease with which this key artery for food trade may be shut down when insecurity peaks.
In 2015 and 2016, tensions between Turkey and Russia also rose, over the war in Syria which prompted further military manoeuvres in the Turkish Straits before Turkey’s shooting down of a Russian military jet in November 2015. Over this period, Turkish naval fleets obstructed Russian vessels transiting the Bosphorus Strait and there was a reported spike in the number of Russian warships using the strait too. Although there was a rapprochement between Turkey and Russia in 2017, and few expect the Turkish Straits to be permanently blocked in the near term, future blockading of this strategic chokepoint under the terms of the Montreux Convention is not beyond the realms of possibility should bilateral tensions escalate again.
We consider the possibility that climate impacts in Syria could lead to a re-escalation of the Syrian conflict including between the proxy powers of Turkey and Russia. We assume that Turkey consequently blockades vessels transiting the Turkish Straits for the two months of the year during which 40 per cent of Black Sea breadbasket harvests are typically transported. Some of this harvest can be held in storage facilities in the region and shipped after the blockade is lifted but, we assume, 30 per cent of the crop would be spoiled. Therefore, 12 per cent of annual agricultural commodity trade through the straits is affected (0.4 x 0.3).
The Ukrainian conflict, although not directly related to climate impacts, will likely lead to similar but more significant, outcomes given the closure of Ukrainian ports and the likely impacts of the war on 2022/23 harvests as well as the fact that the majority of Black Sea exports have to pass through the Turkish-controlled Bosphorus and Dardanelles Straits. Therefore, the volumes transiting the Turkish Straits closely relate to the volumes affected by interruptions to Black Sea ports. The current conflict has not directly affected the passage of merchant vessels through the straits themselves, although Turkey, a NATO member, has closed them to Russian military ships other than those returning to base under the provisions of the 1936 Montreux Convention. The convention additionally allows Turkey to close the straits to merchant ships from countries that are at war with Turkey itself.
As witnessed in March 2021 following the Ever Given’s grounding in the Suez Canal, blockages to this vital waterway can be extremely disruptive to global trade. In 2021, high wind speeds and a dust storm – aggravated by a rare heatwave in the region that dried the soil and made it more prone to becoming windswept – were blamed for blowing the vessel off course and reducing visibility for navigation. Although rare, strong winds have previously delayed shipping traffic or closed the Suez Canal on at least two occasions in December 2010 and February 2015. Direct attribution of discrete events to climate change remains challenging. However, it is possible that climate change could have contributed to the extreme large-scale weather pattern responsible for the 2021 sandstorm. There was an amplified and wavy jet stream pattern in the region at the time, with a strong ridge of high pressure over the Middle East and a strong trough of low pressure just to its west over the central Mediterranean Sea – both features were about two standard deviations from the mean. In recent years, there has been a significant increase in similar ‘global weirding’8 extreme jet stream patterns in the summer due to a phenomenon known as quasi-resonant amplification (QRA) potentially a result of rapid Arctic heating.
We consider the possibility that a similar QRA-driven event could also cause strong storm surges in the Red Sea's Gulf of Suez at the southern end of the canal which would not just affect vessels in the canal but would also lead to infrastructure damage at Port Taofik where the Red Sea and Suez Canal meet. We assume such damages could render the canal unnavigable for six weeks while damage is repaired and ships are re-floated. Under this scenario, 12 per cent of agricultural commodity throughput would be affected.9
Based on baseline middle-of-the-road (SSP2) expectations, 38 per cent of the value of global trade in agricultural commodities, excluding fertilizer, is expected to transit these three chokepoints in 2030. In other words, 20 per cent is expected to pass through the Panama Canal, 10 per cent through the Turkish Straits, and 8 per cent through the Suez Canal (Figure 4).
Rice trade has the lowest exposure – just 22 per cent of global rice trade is expected to transit these chokepoints compared with 40 per cent for wheat and coarse grains – and rice trade as a whole only makes up 1.3 per cent of total global trade in these commodities compared with oilseeds that alone comprise nearly half (46 per cent) of total trade.
Of the three chokepoints, the Panama Canal is of most significance to oilseed trade with more than a quarter (26 per cent) of internationally traded oilseeds passing through it in 2030 compared with only 5 per cent through the other two chokepoints.
Wheat trade dependencies are more evenly distributed with 15 per cent passing through the Turkish Straits, 13 per cent through the Suez Canal (with much of the trades travelling southwards after passing through the Turkish Straits) and 12 per cent transiting the Panama Canal.
The envisioned Panamanian disruption will be much more significant to these trades than in the other two shocks since the aggregate value of agricultural commodities transiting the canal and the magnitude of the shock itself are both expected to be the largest.
In total, 10 per cent of the annual global trade in these commodities in 2030 would be directly impacted if the Panama Canal’s throughput were throttled as imagined compared with just over 1 per cent for the described Turkish and Suez disruptions (Figure 5).
Although these latter proportions are small, the impacts could still be significant. The brief 2021 Ever Given blockage in the Suez Canal directly affected only around 0.3 per cent of merchandise trade that year but the rippling downstream impacts were still being felt months later. For some countries and regions, their high dependencies on particular production regions and trade routes for their food security will result in them being much more exposed and vulnerable to even relatively small disruptions. Egypt, Benin and Somalia, for example, are all currently dependent on the Black Sea region – and therefore the Turkish Straits – for more than 80 per cent of their wheat imports.
Direct exposure is one of the most important factors determining disruption risk. But the effects are also transmitted indirectly through international grain prices, which can affect domestic food prices, which can ultimately cause much broader welfare impacts and affect the legitimacies of governments to pull on just one strand of a plausible risk cascade. Looking at the price effects alone, there are two important components of how supply constraints translate into impacts on prices: the extent of co-integration across international food commodities and the transmission of prices from world markets to local markets.
In the former case, there is clear evidence of co-movement across commodities, as demand can often substitute between them and they have similar input and output dependencies. There is some debate about the extent to which greater financialization of agricultural markets has also contributed to co-integration. However, these cross-commodity movements are not always consistent. For example, rice prices since the COVID-19 pandemic have been much more stable than prices for other staple grains. This contrasts to earlier food price crises when rice price movements were more consistent with other cereals and oilseeds.
In the latter case, food price levels and price volatility are of universal concern but are especially challenging for low-income consumers and farmers. Consumers spending large proportions of their incomes on food are vulnerable to agricultural commodity price volatility. This is particularly the case in many developing countries where a large proportion of food spending goes on staples and where smaller food industries result in a more direct relationship between wholesale and retail prices.
Low-income farmers who are highly dependent on food sales for their incomes are often not able to benefit from higher prices as they have little capacity to time their sales, share risks or make longer-term investments in response to price signals. Price transmission from international markets to domestic markets is uneven and often partial, lagging, and asymmetrical, remaining high in domestic markets, even when international prices are cooling off. In general, volatility transmission is more common when imports and exports are large relative to domestic requirements.
Given the importance of these indirect impacts, some of the most instructive results from the model are those that express the contraction of imports resulting from the chokepoint disruptions as changes to the prices of agricultural commodities – including those not directly accounted for – and food industry produce, which uses the affected agricultural commodities as inputs, in addition to changes to the economic output of the downstream food industry.
The impacts of the Panama Canal disruption result in generalized price increases for agricultural commodities and food industry produce in Europe. The increases are greatest for other grain and wheat prices in the main Mediterranean region and northern EU despite limited direct exposure to the disrupted trades. The prices for oilseeds, to which Europe has the most direct import-disruption exposure, are the next largest increases, but here prices in the rest of Europe and the eastern EU are most affected (Figure 6).
For the smaller Turkish Straits and Suez Canal disruptions, the price rises are less widespread across food types. In fact, there are generally more price decreases than increases. The decline in the price of wheat following the envisioned Suez incident is particularly marked. Of the increases, miscellaneous grain prices are potentially of most concern both in Mediterranean regions in the case of the Turkish blockage and in the Northern EU for the Suez Canal disruption. In both cases, the increases are not as large as under the other shocks. Further analysis is required to understand better what is contributing to the positive and negative price movements from the disruptions. Some are due to production responses within Europe, for example, rice production increases and imports decrease following the Turkish and Suez disruptions. This modelled European production dynamic, however, assumes that the climate conditions on the continent are conducive to increased production. Should Europe – or any other region demonstrating a production response – be affected by concurrent climatic impacts, this could limit the ability of producers to respond rapidly to mitigate chokepoint-related impacts.
In terms of the economic output of the food industry, in all regions of Europe there are very small negative changes from the Panama Canal dislocation. This is in common with the rest of the world beyond the Americas, where the impacts are positive, most noticeably in Argentina and Canada. The shock to the Turkish Straits results in little change to food industry output, except for Black Sea countries where the impact is generally more negative, with the noticeable exception of Ukraine which sees a large increase in output.
Within Europe, the food industry of the Mediterranean regions witnesses the largest negative impact. The Suez disruption results in very small positive impacts in Europe. Indeed, the most significant negative impacts are in the Middle East and North Africa while the most significant positive impacts are in Ukraine, Argentina and Canada (Figure 7).
The envisioned shock to the Panama Canal is much more significant in terms of its direct impacts on the passage of global agricultural commodity trade than those described for the Turkish Straits and the Suez Canal. However, the price impacts in the EU from these shocks are of a similar magnitude, partially explained by Europe’s more limited exposure to the Panama Canal other than for oilseeds but also reflecting that price impacts are transmitted indirectly.
The impacts on food industry outputs suggest that European industries may be impacted relatively lightly compared with other regions. Work is required to analyse further the direction and magnitude of these impacts and their interregional distribution, how price changes translate into food-industry economic output changes and how different socio-economic and climatic conditions may mediate this too.
It is also worth reiterating that the results reflect annualized changes whereas the shocks are relatively short-lived and likely to lead to acute disequilibrium price spikes and downstream disruptions that may be brief but nonetheless impactful.
It is clear that appropriate risk-based management of maritime and coastal chokepoints, and the dependencies upon them, will likely become even more important for global food security. This is not least as demands for imported agricultural commodities are expected to increase alongside the risks to chokepoint disruption from underinvestment, weak governance, climate change and other emerging disruptive hazards. The COVID-19 pandemic has led to severe demand disruptions in the food system at multiple levels, yet, despite the sizeable impacts on supply chains, food systems have continued to function reasonably well. Nevertheless, subsequent events, such as the Ever Given Suez blockage and the Russian invasion of Ukraine, have demonstrated that food supply chains are far from resilient and that critical logistical networks are increasingly prone to disruptive interruptions that demand greater mitigation.
- 1. Using the Chatham House Maritime Analysis Tool and the Chatham House Resource Trade Database (www.resourcetrade.earth), which underpinned the analysis in Chokepoints and Vulnerabilities in Global Food Trade.Back to inline
- 2. The Intertemporal ComputableEconomic System (ICES) general equilibrium model (which shares the core structure of the GTAP-E model) is used to conduct a macroeconomic assessment of cross-border impacts, using climate impacts on agricultural yields derived from the Model of Agricultural Production and its Impact on the Environment (MAgPIE). For further methodological details on the CASCADES macroeconomic assessment see Delpiazzo, E., Dasgupta S., Key R. Parrado, R., Bosello F., Bodirsky, B., King R. (2021), “Macro-Economic Impact Assessment of Cascading Effects of Climate Change,” CASCADES D3.4.Back to inline
- 3. These use the widely employed RCP-SSP framework. The climate dimension is described through different Representative Concentration Pathways (RCPs) that define levels of radiative forcing up to 2100 relative to pre-industrial times; these are simulated with global climate models. Shared socio-economic pathways (SSPs) define the dimension of socio-economic conditions.Back to inline
- 4. Parameterized based on SSP2’s medium expectations across the following dimensions: population and labour force growth, income growth, agricultural yield growth, improvements to energy efficiency, fossil fuel prices, and the degree of international trade openness.Back to inline
- 5. Parameterized based on SSP3’s expectations across the following dimensions: high population and labour force growth, low income growth, low agricultural yield growth, low improvements to energy efficiency, medium fossil fuel prices, and a low degree of international trade openness.Back to inline
- 6. Parameterized based on SSP5’s expectations across the following dimensions: low population and labour force growth, high income growth, high agricultural yield growth, medium improvements to energy efficiency, high fossil fuel prices, and a high degree of international trade openness.Back to inline
- 7. The quantified interruptions to global trade are implemented in the ICES model as a technological change coefficient negatively affecting specific bilateral trades.Back to inline
- 8. More extreme and intense weather events thought to be due to global heating.Back to inline
- 9. Six of 52 weeks equates to 12 per cent of the year.Back to inline