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Study links severe drought to far higher wheat prices

Researchers estimate average wheat could rise to about $364 per tonne at 3 degrees of warming, up from roughly $273 per tonne at 2 degrees.

Reported · Written up by our desk · Agriculture

A new study says warming-driven water scarcity could sharply raise wheat prices, with the link between drought and prices stronger for wheat than for maize. It finds that severe water scarcity can explain about 74% of annual fluctuations in global wheat prices from 2000 to 2021. The research, led by investigators from Aarhus University in Denmark, connects climate data, crop production areas, and global commodity prices to assess what happens when multiple major wheat-growing regions face drought at the same time or in close succession. The study argues these compound drought events can show up beyond farms, reaching consumer food markets and bakery aisles. To capture these conditions, the team developed a Severe Water Scarcity indicator, measuring the share of global cropland experiencing drought during months when crops are most sensitive to water. It reports that historically about 5% of the world’s wheat-growing area experienced severe water scarcity in any given year, but the figure exceeded 15% in particularly dry years such as 2000, 2010, 2012, and 2020.

The authors project that severe water scarcity will spread across a larger portion of wheat-growing regions as temperatures rise. In climate model scenarios, average wheat prices are estimated at about $273 per tonne at around 2 degrees of global warming, and about $364 per tonne at around 3 degrees, which the study describes as roughly three times the inflation-adjusted 2010 wheat price.

Latest closeWheat $763.25 ▲11.3%

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