Climate change may cause wheat price spikes and economic inequality

An international research team has estimated the impact of climate change and extreme climate events on global wheat supply, warning of steeper wheat price spikes and economic inequality.

Using a novel modelling approach, the researchers examined what wheat supply and the demand chain would look like in a 2C warmer world.

They found that we may see slightly greater wheat yields under 2C warming, with the effect of CO2 fertilization cancelling out temperature stress on crops.

However, the modelling suggests that this would not make wheat more affordable, with global wheat price spikes becoming higher and more frequent, placing additional economic pressure on people’s daily lives.

‘This counterintuitive result is initially driven by uneven impacts geographically. Wheat yields are projected to increase in high-latitude wheat exporting countries but show decreases in low-latitude wheat importing countries,’ said lead author Zhang Tianyi, an agrometeorologist at the Institute of Atmospheric Physics, Chinese Academy of Sciences.

Co-author Karin van der Wiel, a climate scientist at the Royal Netherlands Meteorological Institute, further explained: ‘This leads to higher demand for international trade and higher consumer prices in the importing countries, which would deepen the traditional trade patterns between wheat importing and exporting countries.’

Earlier researchers pointed out that trade liberalization would help mitigate climate stress via improving market mobility.

The current research team revealed that such policies could indeed reduce consumers’ economic burden from wheat products.

However, the impact on farmers’ income would be mixed. For example, trade liberalization policy under 2C warming could stabilize or even improve farmers’ income in wheat exporting countries but would reduce income for farmers in wheat importing countries.

‘These results would potentially cause a larger income gap, creating a new economic inequality between wheat importing and exporting countries,’ said Wei Taoyuan, co-author and an economic scientist at the CICERO Center for International Climate Research. Zhang further explained more dependence on imports could lower the wheat self-sufficiency ratio, thus causing a ‘vicious negative cycle’ for wheat importing and less-developed countries in the long term.

‘This study highlights that effective measures in trade liberalization policies are necessary to protect grain food industries in importing countries, support resilience, and enhance global food security under climate change,’ said Frank Selten, a researcher at the Royal Netherlands Meteorological Institute and co-author of the study.

Photo by Melissa Askew