Climate Change Could Triple Wheat Prices as Drought Spreads Across Growing Regions

Widespread drought can move wheat prices far beyond the farms where water shortages begin. An international study found that severe water scarcity (SWS) helped explain about 74% of year-to-year variation in global wheat prices between 2000 and 2021. Using the relationship between water scarcity and prices, the researchers estimated average wheat prices of roughly $273 per tonne at 2°C of global warming and $364 per tonne at 3°C—the latter approximately three times the inflation-adjusted global wheat price recorded in 2010. 8

The findings do not mean drought mechanically determines every price change. Energy and fertiliser costs, inventories, trade policy, conflict and transport disruptions also affect wheat markets. But they show why drought becomes a global economic risk when it strikes several important producing or exporting regions at the same time.

What the study found about drought and wheat prices

The study uses severe water scarcity as an indicator that captures both the geographic extent and the persistence of drought during the periods when crops need water. Its central finding is that the amount of wheat-growing land exposed to SWS tracked global wheat-price fluctuations unusually closely during 2000–2021. 38

Historically, about 5% of the world’s wheat-growing area experienced SWS in an average year. In particularly dry years—including 2000, 2010, 2012 and 2020—the affected share rose above 15%. 8

That distinction matters. A drought confined to one region can sometimes be offset by harvests elsewhere. A synchronized drought reduces the number of places able to compensate for lost production, leaving importers and traders more exposed to a global supply shock.

Why wheat is especially exposed

Wheat is widely traded internationally, and a relatively concentrated group of exporting regions supplies a large share of the world market. When water scarcity affects several of those regions together, production losses can transmit quickly through international prices and food-import bills. Trade chokepoints can amplify the problem: Russia and Ukraine account for around one-quarter of globally traded wheat and barley, while roughly 40% of wheat and coarse-grain trade is exposed to the chokepoints examined in one analysis. 28

The study found a substantially stronger relationship between widespread water scarcity and wheat prices than between SWS and maize prices, while it found no comparable relationship for rice. That comparison should be interpreted carefully: the evidence identifies a strong statistical relationship, not one single proven mechanism that explains every difference among crops. Wheat’s global trade exposure and the concentration of supply in major exporting areas offer a plausible explanation for its greater sensitivity. 3

What prices could look like at 2°C and 3°C

The study’s estimates put the average global wheat price at approximately $273 per tonne under 2°C of warming and $364 per tonne under 3°C. The 3°C estimate is roughly triple the inflation-adjusted 2010 benchmark. These are scenario-based estimates derived from the drought–price relationship; they should not be read as a precise forecast for a particular year or as evidence that climate change is the only cause of future price increases. 8

Other research points to a related risk: under a 2°C-warming scenario, consumer price spikes that would occur about once every 20 years in the present climate could occur about once every 17 years. 7 More frequent spikes would matter most for households and countries that spend a large share of their budgets or foreign-exchange earnings on food imports.

The long-term drought risk for wheat-growing land

Earlier climate projections found that, without mitigation under a high-emissions pathway, up to 60% of today’s wheat-growing area could face simultaneous severe water scarcity events by the end of the century, compared with roughly 15% today. Climate stabilisation consistent with the Paris Agreement would substantially reduce the risk, but would not eliminate it; the projected effects would still be higher than current conditions. 5

These projections describe the share of cropland exposed to simultaneous water scarcity, not a guaranteed loss of 60% of wheat production. Actual outcomes would also depend on crop varieties, irrigation, farm management, adaptation, trade and the ability to shift production.

Why current market disruptions matter

Climate-driven drought is only one source of pressure on wheat markets. Conflict and logistics can produce a similar supply squeeze even when harvest conditions are not the primary problem. Recent attacks on Black Sea grain infrastructure disrupted shipments, increased food-security risks for major importers and pushed benchmark Chicago wheat futures more than 17% higher from the start of July in the cited report.

The combination of climate shocks and transport disruptions is more dangerous than either risk considered in isolation. When drought reduces available supply and damaged ports or shipping routes restrict what can move, importers have fewer alternatives and prices can react more sharply.

Drought is an international food-security problem

The study’s broader lesson is that wheat drought should not be treated only as a collection of local agricultural emergencies. Simultaneous production shocks can spread through trade, inventories, transport networks and consumer prices.

Reducing that risk requires two tracks at once: cutting emissions to limit the growth of water scarcity, and preparing for the disruption that climate change can no longer fully avoid. More resilient production, dependable trade routes, adequate stocks and support for import-dependent countries can all help reduce the impact of synchronized drought. The evidence supports treating these measures as part of international market and food-security policy—not just farm-level adaptation. 35