Food system shock: the insurance impacts of acute disruption to global food supply
Global food systems are increasingly susceptible to acute disruption and systemic shocks could lead to food price rises, food riots and changes in stock market values. The global food system is increasingly vulnerable to acute disruptions that have the potential to cause widespread economic, social and political implications, according to a new report by the insurance firm Lloyds. It highlights that a combination of just three catastrophic weather events could lead to the quadrupling of Wheat, maize and soybean prices. The report explores what could happen to the global food systems in a scenario where three likely extreme weather events – El Nino (the warming phase of the Pacific Ocean, largely associated with the potential for flooding), the spread of windblown wheat rust in Russia and warmer temperatures in South America – are combined. This series of events, according to researchers, could lead to food riots breaking out in urban areas in the Middle East, North Africa and Latin America. It claims that in the face of the political instability this would cause, it could have knock on effects for a wide range of businesses.