Climate Change Wreaks Havoc on Global Wheat Prices

A new study has found that severe water scarcity caused by climate change can significantly impact global wheat prices. The research, published in Earth's Future, analyzed data from 2000 to 2021 and found that when multiple major wheat-producing regions experience drought and water scarcity, the effects can spread through international markets and eventually be reflected in consumer prices for bread, pasta, and other wheat-based foods.

The study used a Severe Water Scarcity (SWS) indicator to estimate the share of cropland exposed to drought during the most water-sensitive stages of crop growth. For wheat, it was found that approximately 74% of annual fluctuations in global wheat prices could be explained by the extent of SWS-affected area.

Historically, about 5% of the world's wheat-growing area experienced severe water scarcity in an average year, but this share exceeded 15% in particularly dry years such as 2000, 2010, 2012, and 2020. Future climate projections suggest that severe water scarcity may affect larger portions of global wheat-producing regions as temperatures continue to rise.