The Independent/London

Pressure on the world’s resources is becoming so great the situation could trigger a proliferation of hunger and warfare across the globe, according to a stark analysis published yesterday.

With demand for basic commodities such as wheat and copper set to soar over the next 20 years, relatively small shocks to supply risk causing sudden price rises and triggering “overreactions or even militarised responses”, says a report by the Chatham House think tank.

Global trade is so interconnected that no importer of resources is insulated from the problems of key exporters – a fact of concern to the UK, which imports 40% of its food and a high proportion of the fossil fuels and metals it consumes, it warns.

“Shocks reverberate across supply chains when communities protest in Peru, rainfall levels drop in the American Midwest, or a flood hits Australia – often sending the global resource markets into a tailspin,” according to the report, entitled Resources Futures.

Chatham House is calling on the world’s 30 biggest producers and consumers of resources - including the UK, China and the US - to form a G8-style “coalition of the committed” to tackle the increasing volatility in global commodity prices.

“As a major importer of resources and an important donor to the developing world the UK can play a very important role in this coalition,” said Bernice Lee, the report’s lead author.

The price of the average commodity, including everything from corn and soya to nickel and iron ore, has soared by 147% in real terms since 2000 as fast-growing countries such as China demand ever more resources, while the global population soars and weather increasingly deviates from traditional patterns.

Compounding the problems associated with rapidly rising prices, financial speculators have spotted an opportunity to profit from the resources boom, investing hundreds of billions of dollars in the past decade.

This speculation has exacerbated price volatility, which was already on the rise as growing shortages of key materials prompted governments to impose more export restrictions, according to Chatham House.

“Volatility of prices is the new normal, hitting both consumers and producers,” it warns. “Fluctuating prices will create chaotic chain reactions unless governments and businesses get to grips with a new world order defined by resource politics.”

Rising commodity price volatility is likely to prove hugely damaging for the global economy because it increases the risk of producing food, metals and other resources.

This deters investment in resource production, which reduces their supply and pushes up their prices, the report says.

“Confronting volatile prices is effectively an insurance policy for the global economy. Investing in social and environmental improvements in new producer states in the developing world is not charity, it is a crucial part of this insurance policy,” says the report.

The “Resources 30” coalition’s “first task should be to tackle price shocks”, says the report. It should then devise guidelines on the use of export restrictions and push for greater transparency among state-owned resources companies.

Food, metal and fuel prices have been nearly four times as volatile since 2005 than they were in the preceding 25 years, according to figures from the International Monetary Fund, which show that a key measure of price fluctuations rose from 4.1 in the first period to 15.1 in the second.

Furthermore, the report warns that, following “unprecedented” increases in demand for resources in the past decade, the trend is set to accelerate, with global steel demand set to soar by 90% by 2030, copper to rise by 60% and gas by 44%.

In the past decade, resource trade has grown by nearly a half in weight terms, as global use of coal, palm oil and iron ore has grown by between 5 and 10% a year and oil, copper, wheat and rice has risen by 2%.

The world’s resource production powerhouses are China, the US, Europe, Australia, Brazil, Russia and Indonesia, according to the report, which is based on 12mn “data points” covering 1,200 types of resources in 200 countries. Chatham House is not the first group to warn about the growing strain on resources, but the depth of the report and severity of its findings mean it will cause considerable concern to governments.

The group was voted the second most influential think tank in the world last year by the University of Pennsylvania.