Cost drivers of international grains and oilseeds trade

Abstract

Despite the importance of international trade for food security, high production costs and trade frictions are still prevalent, contributing to regional heterogeneities in the landed cost of food commodities. Here, we quantify the landed cost for six grain commodities across 3,500 subnational regions. We find large heterogeneities in the costs of imported foods, which are highest in Oceania, Central America and landlocked Africa. While some regions have uniform landed costs across sourcing locations, others face large cost spreads across trading partners causing volatility in food prices. Regions with high transport costs are more sensitive to price shocks to food production/transport inputs. We find that most regions could benefit from a targeted approach to reduce landed cost while others benefit from a mixed strategies approach. Our results highlight that spatial information on production, trade and transport is essential to inform policies aiming to build an efficient and resilient global food system.