Dr Anna Moss explains the outlook for food related risks in 2011

High prices and food shortages adversely affect global supply chains, foreign direct investment and international aid.

Companies also face reputational risks for exporting commodities from countries with limited domestic supplies.

Gulf Arab states have for instance acquired land in Africa to feed their own populations despite the shortage of food on the continent.

Companies in countries such as Somalia, Ivory Coast and Haiti have faced political and economic instability as a result of food insecurity.

In these cases, delivery vehicles, shops and warehouses may be attacked or looted and trade may be affected by bans on commodity exports such as those already seen in Russia.

The risk of such events is elevated in 2011, with Algeria already seeing civil unrest as a result of the rise in the price of basic foodstuffs.

With shortages and rising prices now directly or indirectly impacting all economies, food security has become a critical and unavoidable issue that is increasingly dominating global debates alongside those on energy and water security.

As the demand for biofuels grows, and many regions face increasing demands on limited water supplies, the interconnectivity between these three risk areas will increase.

Dr Anna Moss is a environmental analyst at Maplecroft

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