ABSTRACT

Introduction With the continuous population growth and related developments, water resources have become increasingly scarce in a growing number of countries and regions in the world. As the largest water user, accounting for more than 80 percent of the global total water withdrawal, food production is directly affected by water scarcity. In many water-scarce countries, an increasing amount of food is being imported to meet the domestic food demand. For these countries, importing food is virtually equivalent to importing water that would otherwise be needed for producing the food locally. Allan (1993) termed the water embodied in food import as “virtual water.” In recent years, the concept of virtual water has been extended to refer to the water that is required for the production of agricultural commodities as well as industrial goods (Hoekstra and Hung 2005). Nevertheless, discussions on virtual water issues have so far focused primarily on food commodities, due to their large share in total water use. With the intensification of water scarcity in many areas of the world and looming impacts of climate change, the role of virtual water trade in balancing local water budget is expected to increase. This chapter examines global virtual water flows associated with international food trade. The role of the virtual water trade in redistributing global water resources and compensating for water scarcity is assessed, and opportunity costs of green and blue water uses and environmental impacts are discussed. The analysis is made on two dimensions: the global and country levels, and the exporting and importing countries.