Drought-Stricken Wheat Fields Drive Global Prices to New Heights

A new international study has found a strong link between drought and wheat prices on global markets. Researchers used climate observations, crop maps, commodity-price records, and climate-model simulations to investigate how water scarcity affects wheat production.

The study focused on severe water scarcity (SWS) events in major agricultural regions, which can reduce confidence about future supplies and drive up prices. Wheat was chosen because it is grown in many areas with limited water availability and is a key commodity in international trade.

The researchers developed an SWS indicator that combines short-term and long-term water deficits to measure the vulnerability of wheat crops to drought. They found that the extent of severe water scarcity closely tracks year-to-year changes in global wheat prices, explaining 74% of the variation between 2000 and 2021.

The study projects that at approximately 3°C of warming, the average wheat price could rise to around $364 per ton, roughly three times the inflation-adjusted global wheat price recorded in 2010. The researchers argue that large-scale water scarcity has been an underappreciated component of the food system and must be accounted for in food-security planning.