Climate Change Impacts on Global Agricultural Trade Patterns : Evidence from the Past 50 Years

Climate variability affects the specialization and portfolio of production and trade in agricultural markets. Previous studies suggest that climate change has a negative impact on economic growth and production patterns, and in particular it significantly alters yields and commodity prices. This paper investigates the impacts of climate change on agricultural trade using detailed estimates of temperature and precipitation for 67 countries from 1962 to 2014. This study controls for national income, comparative advantage in land, technology and productivity, climatic zone differences, estimates of agricultural nominal rates of assistance, and trade membership. Utilizing Prais-Winsten Panel Corrected regressions, the study produces aggregate and sectoral estimates at the global, regional, and income level. Findings suggest that climate change, over the period considered, has a significant impact on agricultural exports at all levels. Rising temperature significantly reduces agricultural exports from Asia and Africa, while it benefits Australia-New Zealand. Exports of grains, oil seeds, livestock, and dairy and eggs, are found significantly vulnerable to temperature changes. Developing economies show a larger reduction in agricultural exports due to increases in temperature. The findings provide a detailed evidence of how agricultural export patterns are vulnerable to variations in climatic conditions, and they could be used in further projections considering climate change as a determinant of agricultural production and trade