How Climate Change, Supply Chain Strain, and COVID-19 may Impact our Food
A new insight from McKinsey warns that a food shortage could be coming sooner than later. Many people have heard the rumors or worries regarding possible food shortages and have even felt the impacts of rising prices. As it turns out, due to the War in Ukraine, supply chain issues that are leftover from COVID-19, and climate events such as heat waves and droughts, this could leave the world about 60 million tonnes of grain behind by the end of 2023. This shortage of grain poses a massive issue for the world, as the human diet is highly dependent on grain making up about 50% of our daily calorie intake.
Going a level deeper
According to this new article from McKinsey, the Russia and Ukraine conflict happening in of the the worlds six “breadbasket” regions and in the black sea - which is a critical supply and transit hub for wheat and fertilizers - is massively affecting global food security, pushing our system into a “high risk” zone.
In July of this year there was a deal signed that in summary would free up about 20 million tonnes of grain that were stuck in black sea ports. This has helped a bit in terms of relieving the market and has even lowered prices on select cereals. Unfortunately, while there was a marginal improvement, due to logistic issues and worries regarding on how the grain was stored. It’s possible that this will make it difficult for the grain to reach customers or even be fit for human consumption. While this is an immediate concern, this is also coupled with some more long-term complications.
The deficit in 2023 could reach roughly 23 million to 40 million metric tons, according to our worst-case scenario, assuming a prolonged crisis in which the recently signed agreements don’t work. The larger deficit represents a year’s worth of nutritional intake for up to 250 million people, the equivalent of 3 percent of the global population. In addition to the human suffering this implies, based on the experiences of recent food crises, there are a host of other possible destabilizing consequences.
In past, supply issues within the food system have lead to a variety of issues that hurts economic growth, political stability, raises inflation, lowers fiscal strength, and increases malnutrition. Those typical effects combined with our current world and the impacts of climate change, COVID-19, and the war, makes the world particularly vulnerable to the impacts of supply chain issues and food supply shocks. Heatwaves and droughts caused by climate change are expected to be a major driver of looming global food shortages.
Ultimately this report predicts that some countries will fair better than others in a crisis. Places such as the EU, China, and the US are expected to be fairly well protected whereas nations such as Ethiopia, Bangladesh, Somalia and Yemen are going to be “highly Vulnerable” depending on their dependency on food imports.
According to the article there are a handful of potential actions that could help not only mitigate the current food crisis but possibly avoid future ones. Those actions include 3 short term steps and 3 more fundamental global changes:
unblock and de-risk Black Sea logistic routes
reduce trade restrictions and release buffer stocks; to rebalance global supply, individual countries need to increase the supply of grain traded on the world market
provide financial aid to the most impacted areas and populations
sustainably transform agriculture to boost yields, especially in importing countries with fast-growing populations
find ways to reduce global food waste and optimize use of land for food and biomass production
accelerate the development and adoption of alternative meat and encourage the consumption of the most efficient proteins
You can read the whole report here to learn more: https://www.mckinsey.com/industries/agriculture/our-insights/a-reflection-on-global-food-security-challenges-amid-the-war-in-ukraine-and-the-early-impact-of-climate-change
Sources:
https://www.mckinsey.com/industries/agriculture/our-insights/a-reflection-on-global-food-security-challenges-amid-the-war-in-ukraine-and-the-early-impact-of-climate-change'
https://www.businessgreen.com/news/4054959/risk-climate-change-set-exacerbate-global-food-crisis-spurred-war-ukraine-study-commodities-hub
