Countries Most Vulnerable To Food Shock
By Albert Bozzo, CNBC.com
Click ahead to see the countries most vulnerable to food price surges.
Recent events in the Middle East and northern Africa have shown that the supply and price of food can lead to major social unrest and even the downfall of a government. Many in the developed world take food for granted, but in most developing nations it can be a daily struggle and a life-and-death issue.
The global recession of 2008-09 took some of the wind out of surging agricultural prices, but a rebound is underway. Long term, there's growing concern that globalization will ultimately tax food supplies.
Population and income growth mean more food consumption around the world — and the increased consumption comes at a time when land is being converted to agriculture at an insufficient rate. And, rising obesity in the West is diverting more food to the people who need it least.
Nomura studied food economics in a 2010 report to gauge "the impact of a sustained surge in food prices" on the macro economies of 80 nations, creating a food vulnerability index. The results, Nomura noted, "can vary significantly, depending, among other things, on whether the country is rich or poor, or a large net food importer or exporter.
The 'Nomura Food Vulnerability Index", NFVI, has three components: 1) nominal GDP per capita in USD at market exchange rates; 2) share of food in total household consumption; 3) net food exports as a percentage of GDP. The higher the index score, the greater the vulnerability and higher the ranking.
The U.S. ranked 67, benefiting from the relatively low cost of food and high per-capita GDP. A better ranking was hampered by the low level of food exports. On the other hand, New Zealand, which has the lowest index score, exports a high percentage of its food, even though its citizens might pay more for it. The most vulnerable countries are those where people spend a disproportionate amount of income on food and are net importers.