Agricultural commodities and climate change

Abstract

The agricultural commodity market is sensitive to variations in weather and climate, which can disrupt supply and cause price fluctuations. Some of the key positive and negative impacts of climate change on agricultural commodities, using the examples of wheat and barley, are identified; of particular significance are temperature changes, water availability, and CO₂ fertilization. Although they are not exempt from the negative impacts of climate change, higher latitude regions of production, including Canada and Russia, will benefit the most from climate change. The impacts on other important production regions, such as parts of Europe, the US, and Argentina, will be more mixed. Market stability in all regions will also be affected by changes in climate and weather extremes. To increase resilience to the effects of weather events and climate change on the agricultural commodity market, countries should diversify their sources of supply, encourage more countries to grow and export the relevant commodities, and support crop research and climate adaptation.

Policy relevance

Climate change will substantially affect future food security and the price of agricultural commodities. This study takes a broad approach to identify the key aspects of the agricultural commodities market that are vulnerable to climate change and suggests ways in which policy makers might improve its resilience.

Keywords:

• adaptation
• climate change
• climate impacts
• food production
• food security
• international trade
• integrated assessment
• resilience

Notes

The latest available data were for 2008.

For the cases of rice (a C3-type grass) and maize (a C4-type grass), see Lewis et al. (2010).

An ‘ensemble’ is a group of parallel model simulations.

For a discussion of some of the key uncertainties in climate change modelling and the projections for the 2040s and 2100, see Lewis et al. (2010, Ch. 4).

‘Runoff’ is net water availability, after precipitation and evaporation and any changes in soil moisture storage are taken into account.