The world’s food and agricultural industry is highly concentrated. Only a handful of countries, including the United States, Germany, China, Japan, and India account for more than two-thirds of global food exports, according to the OECD-FAO Agricultural Outlook. As a result, these countries are uniquely positioned to significantly influence market prices and the availability of resources globally. This market concentration can also have a significant impact on the global food supply if any of these markets suffer an economic downturn or experience political unrest.
According to a special report by the International Panel of Experts on Sustainable Food Systems, over 50 countries depend on Russia and Ukraine for at least one-third of their wheat imports. Coupled with record spikes in fertilizer prices, due to supply interruptions from Russia and Belarus, there’s no question that global food prices are top of mind.
Tapping into Emerging Markets
To ensure resilience in the face of such events, it is essential for other countries to tap into increasing trade flows in emerging markets and foster new partnerships with countries outside their region.
For example, African nations are creating new partnerships with other countries to secure access to vital resources like food and energy sources despite economic instability or political unrest in certain regions of the continent.
China’s investments in infrastructure projects across Eurasia have enabled increased access to essential resources like grains, vegetables, eggs and more from East Asia to the Middle East region while also expanding its own export markets.
What does this mean? Recent research suggests China’s emerging Food Silk Road through infrastructure investments could transform how we construct the world’s food supply chains and spearhead a paradigm shift in food security strategies.
With great potential for change to the global food supply and agriculture, it’s essential for companies to reevaluate their own inventory and supply chain management strategies.