Abstract
The risk of food-supply instability is expected to increase along with the frequency and intensity of extreme agro-climatic events in many regions. Assessing the sensitivity of the global agricultural system to evolving extremes requires the probability of occurrence of such events to be estimated and their links with potential food supply and demand culminations to be established. From this perspective, in this article we implement a novel approach that can be used as a tool to inform decision-makers about the resilience of agricultural markets to climate extremes. By incorporating simulated climate-stress events into a partial-equilibrium model of interconnected agricultural commodity markets, we examine the complex manifestations of grain supply, demand and prices attributable to hazardous extremes. Market outcomes are further synthesized into coherently defined vulnerability and risk indicators. The proposed framework currently covers compound heat and water anomalies at the country level, potentially concurrent and recurrent, that impact annual crop yields and market balances in a recursive-dynamic manner until 2030. Our findings indicate that extreme-climate anomalies significantly distort expected market equilibria in the medium term. Moreover, extreme global prices may result either from climate anomalies in single key countries or from simultaneous events in many regions. Last but not least, trade and storage come forth as important alleviative mechanisms of the market uncertainty provoked by recurrent extremes.