Warming Climate Could Triple Wheat Prices, Study Warns

A new study by Aarhus University in Denmark suggests that global warming could lead to a significant increase in wheat prices. According to the research, a threefold increase in wheat prices is possible if global temperatures rise by 3°C. The average price of wheat could reach around $364/t, roughly three times the inflation-adjusted level recorded in 2010.

The study analyzed climate data and found that severe water scarcity is responsible for around 74% of annual fluctuations in global wheat prices between 2000 and 2021. Researchers also discovered that droughts have a stronger impact on wheat prices than corn prices.

Climate modelling showed that a warming of 2°C could push average wheat prices to approximately $273/t, while a 3°C increase could lead to the higher price target of $364/t. The study's authors stress that drought is just one factor influencing wheat prices, and other factors such as energy costs, fertilizer prices, grain stocks, trade policies, and geopolitical conflicts also play important roles.

The researchers warn that simultaneous droughts across major producing countries could become an increasingly important factor for the global grain market. They point out that in particularly dry years like 2000, 2010, 2012, and 2020, severe water scarcity affected more than 15% of the world's wheat-growing area.