The world’s Agricultural Trade

Agricultural production is significantly affected by climate change. Our results suggest that global trade patterns of agricultural commodities may be significantly different from today’s reality – with or without carbon mitigation. This is because climate change and the implementation of a carbon mitigation policy have different effects on a regions’ agricultural production and economy.

Take the US, which in 2015 had 30% of the global market share of coarse grains, paddy rice, soybeans and wheat. We modelled production between 2050-59 under two scenarios: in a world 2℃ average temperature rise, and with a 1.5℃ increase. In both cases, the US market share would shrink to about 10%.

Our results suggest that the cost paid by the agricultural sector to reduce carbon dioxide emissions is offset by the higher food prices projected in the non-mitigation scenario, where agricultural production is significantly affected by climate change. We found that there is a net economic benefit in transitioning to a low carbon economy. This is because agricultural systems are more productive under the mitigation scenario, and able to meet the demand for food imposed by a growing population.

China is currently a net importer of these commodities. If temperature increases by 1.5℃, we expect to see an increase in exports of some products, like rice to the rest of Asia.

(However, it’s worth bearing in mind that limiting warming would be very expensive for China, as it would need to absorb a costly technological transition to a low carbon economy.)

China’s story is different in the 2℃ scenario. Our projections suggest that climate change will make China, as well as other regions in Asia, more suitable to produce different commodities.

China’s economy will keep expanding, whilst the new climatic conditions create opportunities to produce other food commodities at a greater scale and export to new regions.

Our results also suggest that, regardless of the carbon policy scenarios, Sub-Saharan Africa will become the greatest importer of coarse grains, rice, soybeans and wheat by 2050. This significant change in Sub-Saharan Africa imports is driven by the fact that the largest increase in human population by 2050 will occur in this region, with a significant increase in food demand.

In our research Australia was aggregated in “Oceania” with New Zealand. The exports from Oceania to the rest of the world comprised about 1.6% of the total in 2015, which is dominated by wheat exports from Australia.

Our projections suggest that carbon mitigation policies would favour the wheat industry in this region. The opposite occurs without carbon mitigation: the production and exports of wheat are projected to decline due to climate change impacts on agriculture.

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