A new rapid assessment tool for food security risks posed by global price shocks

International food commodity prices have experienced a series of shocks over the past decade. The prices of rice, maize, and wheat spiked in 2007-08 as a result of supply shocks, demand for biofuels, and export trade restrictions. Commodity prices increased again in 2010-11. And most recently, global supply chain disruptions in the aftermath of the COVID-19 pandemic and Russia’s invasion of Ukraine sent international food and fertilizer prices soaring, though they have moderated somewhat after peaking in mid-2022. These commodity price spikes have adversely affected food security in many countries, but the sharpest impact is on low-income countries that depend heavily on imported food.

National policymakers and international development organizations need better information on the vulnerability of each country to different types of economic shocks. Such information can facilitate the design of programs and policies to prepare for and respond to these international food price shocks. To address this need, IFPRI’s Food Security Portal has launched its new dashboard for rapid assessment of Vulnerability to Global Food Price Shocks.

A new vulnerability index

This new Food Security Portal tool provides a simple measure of vulnerability to international price shocks for each country and each major food commodity. The basic idea is to quantify vulnerability by evaluating the risk of higher food insecurity in countries due to a rise in the international price of a food commodity such as rice or wheat. The Vulnerability Dashboard provides a composite indicator comparable across countries, with three components:

• Share of calories that the food commodity represents in the national diet.
• Share of national consumption of the commodity that comes from imports.
• Share of the population that is food insecure.

Mathematically, the food import vulnerability index (FIVI) for an individual food commodity is calculated as follows:

Where:

FIVI_ic = food import vulnerability index for commodity i and country c

C_ic = average caloric intake from commodity i in country c

M_ic = quantity of net imports of commodity i in country c

Q_ic = quantity of domestic consumption of commodity i in country c

MFI_c = share of the population that is moderately or severely food insecure in country c

The rationale for using a multiplicative index is that the vulnerability should be zero if (a) the commodity is not part of the local diet, (b) domestic consumption is based entirely on domestic production without relying on imports, or (c) there is no food insecurity in the country.

The dashboard provides estimates of the food import vulnerability index for 15 staple foods, selected for their importance as a source of calories in the global diet: Wheat, rice, maize, sorghum, millet, beans, groundnuts, soybeans, cassava, yams, potatoes, sweet potatoes, plantains, vegetable oil, and sugar.

The new dashboard also defines an aggregate country-level FIVI: The geometric mean of (a) the weighted average of the import dependence ratio across the 15 staple commodities for each country (where the weights are the caloric contribution of each commodity to total staple calories in that country) and (b) the share of the population that is moderately or severely food insecure.

The national FIVI will be low if imports represent a small share of the calories consumed from the 15 staple foods or the share of the population experiencing moderate or severe food insecurity is low. Conversely, the national FIVI will be high if a large share of the calories of the 15 staple foods consumed comes from imports and a large proportion of the population faces moderate or severe food insecurity.

Vulnerability to higher rice prices

Rice is one example of how the dashboard can be used to assess vulnerability to current food price spikes. Rice prices on international markets have increased by more than 25% between April and November (Figure 1). The spike has been fueled by production disruptions caused in part by the El Niño phenomenon and other adverse weather conditions in some major rice producing countries, as well as by new trade restrictions and stockpiling in main producing countries amid concerns over potential shortages.

Figure 1

Using the new dashboard, one can quickly identify the 15 countries most vulnerable to this price spike—shown in Table 1, along with the components used to calculate the FIVI. The most vulnerable countries are in low-income Africa, including Liberia (FIVI score of 63), The Gambia, Guinea Bissau, the Comoros, Sierra Leone, Benin, Djibouti, and Mozambique. Other highly vulnerable countries include Haiti, Timor-Leste, and several other small island nations. These countries are most vulnerable because they are highly dependent on rice imports (43%-100%), have high shares of rice in total calorie intake (12%-47%), and have a high prevalence of food insecurity (37%-87%).

Table 1. Fifteen countries with highest index of vulnerability to rice price increases

Figure 2 shows the global patterns in vulnerability to higher world rice prices. (Countries shaded in blue are exporters, so they are not considered vulnerable and should actually benefit from higher rice prices.) In addition to those listed Table 1, Senegal, Guinea, Yemen, and Papua New Guinea also have vulnerability indices of more than 40, putting them in the high vulnerability category.

Figure 2

Notably, we find that many countries in Asia where rice is the dominant staple food are not particularly vulnerable to the shock, mainly because they either export rice or only import a small share of their needs. The most vulnerable countries, by contrast, face complicated policy challenges in addressing high prices amid problems of already weakened import capacity because of earlier global shocks in recent years, and already high pre-existing levels of food insecurity. The information generated by the FIVI will be useful for policymakers and international development partners in mitigating the food security impact of these price shocks.

Nicholas Minot is Deputy Director of IFPRI's Markets, Trade, and Institutions (MTI) Unit; Rob Vos is MTI Director.

Acknowledgements:

The Food Security Portal’s Vulnerability to Global Food Price Shocks dashboard was developed and is being maintained by a larger team comprising Boyeong Park, Soonho Kim, Sediqa Zaki, Pierre Mamboundou, and the two authors of this post. Funding for this endeavor received from the European Commission, FCDO, and USAID is gratefully acknowledged.