Wheat Prices Could Triple Due to Severe Water Scarcity Under Climate Change

A new international study published in Earth's Future has found that severe water scarcity can explain around 74% of annual fluctuations in global wheat prices between 2000 and 2021. Researchers combined climate data, crop production areas, and global commodity prices to investigate the impact of drought on wheat markets worldwide.

The study used a new indicator called Severe Water Scarcity (SWS) to measure the proportion of global cropland experiencing drought during the months when crops are most sensitive to water shortages. This approach examined what happens when several major agricultural regions are affected simultaneously or in quick succession, which is expected to become more common in a warmer climate.

The researchers found that wheat stands out from other crops, with a stronger relationship between water scarcity and price. Historical data show that severe water scarcity has increased alongside climate change, exceeding 15% in particularly dry years such as 2000, 2010, 2012, and 2020.

Climate models suggest that severe water scarcity will spread across larger portions of the world's wheat-growing regions as temperatures continue to rise. At around two degrees of global warming, the model estimates an average wheat price of approximately $273 per tonne, while at three degrees of warming, the figure rises to about $364 per tonne, roughly three times the inflation-adjusted global wheat price recorded in 2010.