Strong El Nino Likely to Disrupt Global Cocoa, Coffee and Sugar Crops
Global forecasters say a strong El Nino weather pattern is increasingly likely to develop in the second half of the year, boosting temperatures, disrupting rainfall and posing risks to crops the world over.
El Nino Declared and Forecast to Intensify
El Nino is a periodic warming of sea surface temperatures in the eastern Pacific caused by weakening trade winds. [1] It occurs naturally every two to seven years and tends to last between nine and 12 months. [1] The weather pattern typically results in warmer temperatures across the globe, drought in regions including South and Southeast Asia, Australia and Southern Africa, and heavy rainfall in others including the southern parts of South America and the US. [1] The US National Oceanic and Atmospheric Administration (NOAA) declared the arrival of El Nino last week. [1] Moreover, it said the weather pattern is likely to intensify, with a 63 percent probability of a very strong or “super El Nino” heading into next year. [1]
Threat to Global Cocoa Production
Europe prepares for intensifying heat wave amid strong El Nino forecast. — Source: taipei-times Every strong El Nino in the past 55 years has reduced cocoa output, according to investment firm WisdomTree. [1] During the last El Nino, which ran from mid-2023 to mid-2024 and was considered moderate-to-strong, top grower West Africa was initially hit by double its normal rainfall, which left cocoa trees exposed to a fungal disease. [1] In 2024, the weather pattern flipped and West Africa was hit by intense heat and by Harmattan winds that were unseasonably dry and strong, causing the disease-weakened trees to drop their flowers. [1] About half the world’s cocoa is grown in Ivory Coast and Ghana, the world’s first — and second — largest bean growers. [1] Ecuador is the world’s third-largest, and typically sees excess rains during El Nino episodes. [1] Cocoa prices nearly tripled in 2024 after the West African harvest failed. [1] They rose to record levels above US$12,000 a metric ton by late 2024, making the chocolate ingredient more expensive than many industrial metals. [1]
Impacts on Coffee Crops Worldwide
El Nino is especially problematic for robusta coffee as it typically brings higher temperatures and reduced rainfall to top grower Vietnam and No. 3 grower Indonesia from the middle of the year onwards. [1] The adverse weather hits the two countries, which jointly account for some 50 percent of the world’s robusta output, during the crop development phase. [1] Its impacts are then felt from the fourth quarter, during the harvest. [1] “Dryness in Vietnam and Indonesia could significantly trim yields for robusta coffee,” said analysts at Citi. [1] For arabica coffee, nearly half of which is grown in Brazil, the El Nino impact is more nuanced. [1] Carlos Santana, commercial director at trader ECOM’s subsidiary EISA, said El Nino could initially be positive for the crop Brazil is currently harvesting, as higher temperatures could prevent harmful winter frosts. [1] Longer term, however, El Nino typically brings dryness and heat to Brazil’s coffee regions in the fourth quarter when the next crop is developing, putting it on course to hurt output next year. [1]
Sugar Market Outlook Under El Nino
For sugar, one of the most widely traded soft commodities, El Nino typically brings excess rain in the second half of the year, which can disrupt and reduce the quality of the harvest in top grower Brazil. [1] In No. 2 sugar grower India and No. 2 exporter Thailand, by contrast, the weather pattern typically reduces rainfall during the summer monsoon. [1] India expects the 2026 monsoon will bring the lowest rainfall in 11 years, with showers during the June to September crop development period seen at 90 percent of the average. [1] Broker Hedgepoint’s head of sugar, Carlos de Mello, estimates that even a moderate El Nino could cut India’s output by about 1 million metric tons. [1] Longer term, the above-average rains that El Nino typically brings to Brazil’s sugar regions could help next year’s crop. [1] Hedgepoint’s de Mello said overall, it is “hard to have a bull market scenario on El Nino” because of its potential benefits for Brazil’s 2027 sugar crop. [1] Brazil accounts for about half of the world’s sugar exports. [1]
Compounding Challenges for Farmers
El Nino-driven dryness, heat or excess rains are a blow for farmers already grappling this year with the fertilizer and diesel price shocks spurred by the US-Israeli war on Iran. [1] Soft commodities have consistently seen strong price gains during past El Nino episodes. [1]
Other Severe Weather Developments
Europe is preparing for an intensifying heat wave. [2] Mekkhala is likely to near Taiwan on Thursday according to the Central Weather Administration. [3] Minor flooding is occurring and minor flooding is forecast for the Pearl River at Jackson affecting Hinds and Rankin Counties in Mississippi until further notice. [4] At 29.0 feet, farmland in southern Rankin County begins to flood and water begins to affect homes. [4] Minor flooding is also occurring and forecast for Tuscolameta Creek at Walnut Grove affecting Leake County until early Thursday morning. [5] At 27.0 feet, agricultural land along the river is flooding. [5]
What to watch next: Global forecasters will continue monitoring whether the 63 percent probability of a very strong or super El Nino materializes heading into next year, with potential effects on 2027 crops already noted for coffee in Brazil and sugar in Brazil and India.
