Why the Next Global Food Crisis Could Begin With a Geopolitical Threat

Wars, sanctions, diplomatic threats and energy shocks are no longer distant geopolitical events for agricultural markets. They are becoming transmission lines for food-price instability.

A new study published in Resources examines more than half a century of global agricultural commodity data and finds that food markets are increasingly vulnerable to waves of volatility that move across commodities during periods of geopolitical stress. The research tracks six major agricultural commodities, wheat, corn, soybeans, oats, sugar and coffee, from January 1975 to March 2026, using 12,910 daily observations to understand how shocks travel through global food markets.

Geopolitical risk does not simply raise or lower commodity prices. It makes the relationships among food markets more unstable. This matters for governments, traders, food companies and development agencies because instability in one core commodity can spread across the wider food system, especially when global politics turns volatile.

Food Markets Are No Longer Moving Alone

Agricultural commodities are often treated as separate markets, shaped by their own supply, demand, weather and production cycles. This study challenges that view. It shows that the world's major agricultural commodities are linked through a dynamic network of volatility spillovers.

The research finds that connectedness among food commodities changes over time and intensifies during major crises. In the 1970s, the total connectedness index reached around 70–80 percent, reflecting strong integration during a period of global macroeconomic instability. In the 1990s and early 2000s, connectedness was more moderate, often ranging from 20 to 40 percent.

But the network tightened again during major shocks, including the 2007–08 Global Financial Crisis, the COVID-19 pandemic and the Russia–Ukraine war. During such periods, commodity markets become more synchronized. A disruption in one market becomes more likely to affect others.

For food-import-dependent countries, this is a critical warning. When markets become more connected under stress, diversification becomes harder, price shocks travel faster and domestic food inflation can become more difficult to manage.

Corn and Soybeans Sit at the Center of the Shock System

The study identifies corn and soybeans as the major transmitters of volatility in the agricultural commodity network. Corn transmits 52.98 percent of volatility shocks to other commodities, while soybeans transmit 46.55 percent. Wheat also plays an important role, transmitting 36.76 percent. Sugar and coffee are far less central, transmitting only 12.18 percent and 13.12 percent respectively. Oats, sugar and coffee generally sit closer to the periphery of the network, receiving more shocks than they transmit.

This core-periphery structure matters because corn, soybeans and wheat are deeply embedded in global food, feed, fuel and trade systems. Corn is linked to animal feed and biofuels. Soybeans connect food, feed and vegetable oil markets. Wheat remains one of the world's most politically sensitive staple crops.

When these commodities experience volatility, the effects can reach far beyond commodity exchanges. They can influence livestock costs, processed food prices, household budgets, import bills and humanitarian food procurement. Policymakers and market operators should monitor corn, soybeans and wheat as systemic risk indicators in the global food economy, the study suggests.

Threats Can Move Markets Before Conflict Erupts

Geopolitical threats include rising diplomatic tensions, military warnings, sanctions, strategic disputes and expectations of conflict. Geopolitical acts refer to realized events such as wars, terrorist attacks and military confrontations. The findings suggest that threats matter even before they become full-blown crises. Market participants respond to anticipated disruptions by adjusting inventories, hedging strategies, procurement contracts and trade routes. Governments may also begin securing reserves or preparing import alternatives.

The study finds that geopolitical risk and geopolitical threats do not necessarily increase the average level of commodity connectedness in a simple linear way. Instead, they intensify the volatility of connectedness. Put simply, geopolitical pressure makes the food-market network less predictable.

The wavelet quantile analysis adds another layer: the impact of geopolitical risk is nonlinear, state-dependent and stronger over medium- and long-term horizons, especially during market stress. Realized geopolitical acts may have delayed effects that become more visible over time as supply chains, trade flows and policy responses adjust.

In an era of prolonged conflicts, sanctions regimes and strategic competition, markets may not wait for a war to disrupt supplies. They may reprice risk as soon as credible threats emerge.

Food Security Policy Needs a Geopolitical Radar

Food security can no longer be managed only through production planning. It must also be managed through risk intelligence. Governments should monitor not just prices, but volatility connectedness among commodities. Strategic reserves, diversified import sources and regional trade cooperation can reduce exposure to cascading shocks. For countries in the Global South, especially food-import-dependent economies, this is not only a market issue but a development priority.

The findings also show that oil price volatility and economic policy uncertainty can destabilize agricultural commodity connectedness. This reinforces the close link between food, energy and macroeconomic stability. Higher oil volatility can raise transportation, fertilizer and processing costs, intensifying pressure across agricultural markets.

Food companies, grain traders, feed producers and agricultural investors need procurement strategies that account for geopolitical threats before physical disruption occurs. Hedging models that rely only on normal market conditions may underestimate risk during crisis periods, when commodity linkages tighten.

For international organizations and development agencies, the study strengthens the case for integrating market connectedness into early warning systems. A spike in wheat or corn volatility may signal wider food-system stress before household-level impacts become visible.

The study has limitations. It focuses on six commodities and excludes rice because continuous long-term daily data were unavailable. It uses market data and risk indices, not household welfare or nutrition data and also cannot fully disentangle all causal pathways between geopolitical shocks, investor behavior, supply-chain disruptions and policy responses.

To sum up, protecting food security now requires more than growing enough food. It requires understanding how shocks move through markets before they reach consumers. In an unstable geopolitical era, the next food crisis may begin not with a failed harvest, but with a threat, a trade disruption, an oil shock or a conflict that turns global food markets into a single chain reaction.