The Potential Effect of Climate Changes on Global Trading

Posted on Tuesday, May 17th by

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Climate changes constitute as significant a factor in the context of the trading activity carried out worldwide as the exchange rates, the costs of production, the demand on the market or the availability of raw materials. They can potentially cause trade flows to be redirected, the prices of goods to increase or openings for new trade goods to be created. In other words, they can influence the global trade world significantly, as logistics managers are increasingly advised to note.

This statement is supported by a notable amount of research that is being carried out at the moment, starting at the impact of climate changes on those ecosystems affected by rising temperatures and their products. According to this research, climate changes impact import-export volumes and values, among other variables.

The rising sea levels are causing the wetlands to slip away, and at a very fast pace too it seems, affecting the habitats providing for the various types of seafood. Thus, some countries find themselves in the position of being forced to import some of their seafood in order to meet the market demand. In addition to this, the levels of acidity in the oceans are increasing as a result of an increasing amount of carbon dioxide being absorbed from the atmosphere, causing their waters to be lethal for various sea life forms, such as oysters, for instance. Naturally, in this context, the only solution to meet the market demand is to once again import those particular types of seafood.

The coffee industry is also directly and significantly affected by the rising temperatures, coffee plants being known to grow their best beans in the cool mountains around the Equator. Rising temperatures, on the other hand, create an ideal environment for fungi and beetles, two main forms of pests known to attack coffee plants. Thus, a decreasing quality of the crops is bound to affect the export activity of a coffee producing market and therefore cause the prices of coffee to rise.

Moreover, climate changes are particularly relevant in the context of certain plant species growing exclusively in some parts of the world. Rooibos tea, for instance, also known as red bush tea, is known to grow in South Africa only. Therefore, the drought that hit the country in 2015 caused a massive drop in the country's rooibos tea exports, limiting its availability and causing its price to increase significantly.

Beer and wine are also known to be affected by climate changes, some of the recent European hops crops, for instance, proving highly disappointing and therefore forcing brewers to invest in finding alternatives, while British wine, for instance, is being imported by a number of major wine producing countries.

In addition, the South African floral region is being affected by the rising temperatures too, whereas pine beetles are thriving on the wood in Columbia's pine forests, causing Canada's timber export activity to drop significantly. And unfortunately, the list of damage climate changes are causing within the trading industry goes on.