Goldman Sachs believes that supply risks in the agricultural market are being further amplified by trade fragmentation. While corn, wheat, soybeans, and sugar stocks remain relatively ample at the beginning of 2026, the BCOM agricultural spot index has already risen 24% year-on-year, with wheat up 41%. Meanwhile, the number of new agricultural trade restrictions globally each year since 2020 has roughly doubled.
Goldman Sachs estimates that if regional markets were only half the size of the global market, the same supply shock could have approximately twice the price impact. Small-scale production cuts or transportation disruptions could prompt exporting countries to restrict exports and increase government stockpiles, potentially removing more global supply than the initial physical gap. India's rice export ban before the strong El Niño in 2023/24 temporarily removed about 40% of global rice trade from the export market, although India's final production remained resilient.
This means that if Hormuz fertilizer shipments, Black Sea grain exports, and a super El Niño all materialize simultaneously, grain price volatility could be significantly higher than predicted by a single supply and demand model. In the next phase, in addition to production and inventory, attention should also be paid to export controls, tariffs, biofuel policies, and government stockpiling. Goldman Sachs believes that these policy variables may determine the extent to which supply shocks are ultimately amplified.
