University / Organisation : Paris School of Economics

Paper or project ? paper

Title : Production shocks, network flexibility and supply chain resilience: insights from the Brazilian soybean sector

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Abstract : Understanding how supply chains adapt to supply shocks is essential given their increasing complexity and remains an open question, particularly in the agricultural sector, which is highly vulnerable to extreme weather events. This paper examines how extreme temperatures affect the soybean supply chain in Brazil, from production to trade. We show that extreme heat reduces soybean yields, production and exports in affected municipalities. However, in line with the predictions of our model, exporters respond strategically by reallocating purchases to their unaffected suppliers and expanding their sourcing network. These adjustments mitigate the aggregate impact of supply shocks on international trade, which are heterogeneous across firms.