Weather extremes and trade policies were main drivers of wheat price peaks
April 28, 2017 11:25 AM - Potsdam Institute for Climate Impact Research
Price peaks of wheat on the world market are mainly caused by production shocks such as induced for example by droughts, researchers found. These shocks get exacerbated by low storage levels as well as protective trade policies, the analysis of global data deriving from the US Department of Agriculture shows. In contrast to widespread assumptions, neither speculation across stock or commodity markets nor land-use for biofuel production were decisive for annual wheat price changes in the past four decades. This finding allows for better risk assessment. Soaring global crop prices in some years can contribute to local food crises, and climate change from burning fossil fuels and emitting greenhouse gases is increasing weather variability.