Risks to Agricultural Prices From Food and Energy Security Policy

Research evidence excerpt

Risks to Agricultural Prices From Food and Energy Security Policy

Commodities Research

8 July 2026 | 4:38PM EDT

AGRICULTURE ANALYST

n Global agricultural supply is highly concentrated geographically. Across key crops Lina Thomas

+1(212)902-8376 | lina.thomas@gs.com

such as soybeans, corn, rice, sugar, and palm oil, the top three exporting Goldman Sachs & Co. LLC

countries account for 60-90% of global trade, making agricultural markets highly Daan Struyven

+1(212)357-4172 |

vulnerable to localized weather, geopolitical, or policy shocks. daan.struyven@gs.com

Goldman Sachs & Co. LLC

n Because major agricultural exporters increasingly prioritize domestic food and

energy security through export restrictions and biofuel mandates, even modest

disruptions—or the fear of disruptions—can trigger policies that reduce

exportable supply. In highly concentrated markets, the resulting loss of

exportable supply can be much larger than the original production shock,

amplifying price volatility. Import-dependent countries may in turn respond by

stockpiling and pursuing greater self-sufficiency, often accepting higher

domestic production costs in exchange for supply security. While these measures

are ultimately aimed at improving resilience locally, they also fragment trade,

reduce market liquidity, and increase the sensitivity of prices to future shocks.

n We view the risk of protectionist policy responses as a key source of upside risk

to crop prices and agricultural volatility, as three near‑term supply concerns

could trigger precautionary measures even if the underlying disruptions

ultimately prove limited.

o First, El Niño conditions are already present, with a 63% probability of

developing into a “super” El Niño. Because many major exporters of