The price of raw materials is now the leading threat to businesses in the Asia-Pacific region, according to this year’s Lloyd’s Risk Index.

It has moved from 12th place in 2011, reflecting the importance of manufacturing to the region and the rising cost of supplies.

High taxation is the next-biggest risk, up from 17th, followed by currency fluctuation, inflation and loss of customers.

Lloyd’s CEO Richard Ward warns focusing on short-term issues at the expense of longer-term strategic decisions could leave organisations exposed.

“With costs of many raw materials rising, businesses in the Asia-Pacific region are understandably concerned about managing this expenditure,” he said.

“Yet the danger is that an emphasis on near-term, operational issues comes at the expense of significant, strategic decisions that have previously exercised business leaders.

“With the timetable for global economic recovery likely to be much longer than we hoped, a focus on long-term sustainability and effective risk management should be a priority for boards across the world.”

The index, published every two years since 2009, features responses from 500 of the world’s most senior business leaders.

Globally, the greatest risks were high taxation, loss of customers, cyber risk, price of materials and excessively strict regulation.

Also see ANALYSIS