Optimization and Benefit Analysis of Grain Trade in Belt and Road Countries

Grain trade in Belt and Road (B&R) countries shows a mismatch between the volume and direction of grain flows and actual demand. With economic and industrial development, the water crisis has intensified, which poses a great challenge to the security of world grain supply and demand. There are few studies on the reconstruction of grain trade relations from the perspective of grain economic value. In this paper, a linear optimization model considering opportunity cost is proposed to fill the gap, and it is compared and analyzed with the optimization model considering only transportation cost. The grain supply and demand structures in both optimization results show characteristics of geographical proximity and long-tail distribution. Furthermore, the economic and water resource benefits resulting from the two optimal configurations are compared and analyzed. It is found that the economic benefits generated by grain trade in B&R countries with the consideration of opportunity cost not only cover transportation costs but also generate an economic value of about 130 trillion US dollars. Therefore, considering opportunity cost in grain trade is of great significance for strengthening cooperation and promoting the economic development of countries under the B&R framework. In terms of resource benefits, the grain trade with consideration of opportunity cost saves nearly 28 billion cubic meters of water, or about 5% of the total virtual water flow. However, about 72 billion cubic meters of water is lost for the grain trade with consideration of transportation cost. This study will help to formulate and adjust policies related to the "Belt and Road Initiative" (B&R Initiative), so as to maximize the economic benefits while optimizing the structure of grain trade and alleviating water scarcity pressures.