A leading %Commodities trader is warning of coming “food wars” across the globe as climate change strains supplies of agricultural products.
Sunny Verghese, who is chief executive officer (CEO) of commodities trading firm Olam Agri, warned that crops destroyed by extreme weather and restrictions on trade are likely to exacerbate food inflation and cause a demand-supply imbalance.
“We have fought many wars over oil. We will fight bigger wars over food and water,” said Verghese at a recent consumer conference.
He added that the move by wealthier economies to stockpile grain and other food staples will worsen the current situation and cause greater stress between nations.
Food inflation and food scarcity coming out of the Covid-19 pandemic is creating severe food insecurities in poorer nations and leading to rising political tensions between countries, he said.
At the same time, a hotter climate and unpredictable weather patterns are wreaking havoc in agricultural production all over the world, from flooding in Europe to drought in the U.S.
The current situation has led to record prices this year for commodities such as cocoa, coffee, and sugar.
Verghese added that the worst thing governments can do in the current situation is turn towards protectionism and try to shield their domestic markets and farmers.
However, this is already happening, said Verghese, noting that in recent weeks India has limited rice exports and Norway has announced plans to begin stockpiling grain.
Rather than protect their agriculture sectors, Verghese said that governments should focus on mitigating climate risks, which are only growing more severe.
