How do natural disasters affect agricultural exports?

Global agricultural trade helps to balance the supply and demand for food worldwide, stimulating economic growth and promoting political stability. However, agriculture's inherent vulnerability to extreme weather events and other natural disasters has a significant impact on the industry, which is further amplified through trade and can threaten global food security. This study examines both the mortality and economic losses caused by natural disasters and identifies the mechanisms through which these disasters affect international agricultural trade from 2002 to 2023. The results show that natural disasters cause a decline in the volume of agricultural exports from affected countries, which is much larger than the decline observed in other industries. Despite the high demand inelasticity of agricultural products, which typically leads to increased export prices when production declines, the value of exports still declined significantly over the study period, implying an average annual export loss of 6.21 billion USD and 39,359 jobs. Geological disasters primarily hinder agricultural exports by increasing transportation costs, climate-related disasters by damaging production systems, and biological disasters by increasing storage and compliance costs. We show that disasters have a more devastating effect on agricultural production in less developed countries, which diminishes their global product competitiveness, reduces export prices, and intensifies overall disaster impacts. We also show that countries with low disaster risk, which lack emergency response experience, incur up to 2.053 million USD in agricultural export losses due to disasters. In addition, political risks interact with natural disasters, thereby amplifying their negative impact on agricultural exports. In terms of product heterogeneity, we find that the destructive impact of disasters on primary agricultural products extends through the supply chain to processed agricultural goods, affecting both their production and export. We show that disasters exert an even broader influence on the agricultural system through secondary effects that are 2.83 times greater than the direct impacts. Our findings provide valuable insights and highlight the need for countries affected by disasters to establish disaster prevention and recovery mechanisms to help minimize agricultural trade losses and safeguard global food security.