Experts say Australia’s wheat industry may boom as the global environment suffers. 

The gap between high wheat producing and low wheat producing countries is set to widen under 2°C of global warming, increasing some countries' reliance on imports, according to researchers.

A study by scientists from six countries finds that the effect of CO2 fertilisation could cancel out temperature stress on crops, with a slightly greater wheat yield under 2°C warming as a result. 

However, increases in global yield do not necessarily result in lower consumer prices. Indeed, new modelling results suggest that global wheat price spikes would become higher and more frequent, thus placing additional economic pressure on daily livelihood.

“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 Dr Zhang Tianyi from the Chinese Academy of Sciences.

Co-author Karin van der Wiel, a climate scientist at the Royal Netherlands Meteorological Institute, further explains: “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 have stated that trade liberalisation would help mitigate climate stress via improving market mobility. The current research team reveals that such policies could indeed reduce consumers’ economic burden from wheat products. 

However, the impact on farmers’ income would be mixed. For example, trade liberalisation policy under 2°C warming could stabilise 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. 

“This study highlights that effective measures in trade liberalisation policies are necessary to protect grain food industries in importing countries, support resilience, and enhance global food security under climate change,” says Dr Frank Selten, a researcher at the Royal Netherlands Meteorological Institute.

The full study is accessible here.