EU food sector unprepared for droughts set to hit palm oil, soy & cocoa

By David Burrows

- Last updated on GMT

EU food sector unprepared for droughts set to hit palm oil, soy & cocoa

Related tags Climate change Water

Europe’s food industry could be left exposed to supply shortages and rocketing prices as climate change increases the risk of droughts in key commodity-producing countries.

Around 38% of the EU’s water demand lies outside its borders with 98% of this embodied in imported agricultural products, according to a new report published by the Water Footprint Network. This leaves the bloc “particularly vulnerable”​ to lack of water availability in areas that provide key products

The good news is that, currently, the majority of agricultural commodities imported to the EU are from areas with “low” ​or “moderate”​ drought risks.

But this could change dramatically as global temperatures rise and extreme weather events become more commonplace. One of the report’s authors told FoodNavigator that businesses have little understanding of the threats they face going forward.

“We knew that EU was dependent on water resource outside its borders but [the new findings] is how vulnerable these imports are,” ​explained Dr Ertug Ercin. “One of the most surprising elements for us is that these high dependency and vulnerability to water problems elsewhere in the world has not been addressed in different policies or strategies yet.”

Water, water, nowhere

Dr Ercin and his team calculated that the EU uses around 668 km3 of water for all of the goods it produces, consumes and exports, annually – and over a third of it comes from abroad.

In some areas, water risks are already well known. Some 91% of almond imports are categorised as “highly vulnerable”,​ for instance. There are also immediate concerns for pistachios (87% of imports are vulnerable), grapes (74%), rice (70%), soybean (57%) and sugar cane (56%).

Almost all of the crop products imported to the EU from India and Pakistan are sourced from locations with high levels of water scarcity. For instance, sugar cane and rice from these countries are categorised as “very highly vulnerable”​ to water scarcity.

Supplies of these crops could be disrupted in the “near future”,​ the authors noted in their report, Dependencies of Europe’s economy on other parts of the world in terms of water resources​.​ However, disruptions to rainfall patterns that occur in the future due to the effects of climate change in countries that produce key crops could have a “far greater impact on the EU”​, they added.

Hot spots

The food sector will bear the brunt of this. The meat and dairy sectors are among those most at risk due to their reliance on soy to feed livestock, but the authors also raised concerns for those reliant on cocoa, coffee and palm oil if climate change alters rainfall patterns and increases the risk of drought in countries like the USA, Brazil and Indonesia.

Price increases are something that businesses “need to consider seriously”,​ Dr Ercin said. And whilst some of the large multinationals with global supply chains are understanding and mitigating their exposure to water-related problems, ”they have not fully understood or assessed their vulnerabilities to weather extremes under climate change”.​ 

Firms need to identify hot spots in their chains, where vulnerabilities are high and dependencies are large, he explained. From there they can look at improving water productivity and reducing water footprints down their supply chain. This would be a “better long-term solution” ​than looking to source from different regions, for example within Europe, he added.

The next stage in the EU-funded research by the Water Footprint Network will look in more detail at the impact of climate change on Europe’s vulnerabilities to water scarcity and its implications for sectors, including food and agriculture.

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