El Nino effect may have a hike impact in coffee prices

The ‘El Nino’ effect is causing supply concerns to increase and prices to rise in the coffee and cocoa market. This situation also creates the expectation of warmer, drier weather in coffee and cocoa producing countries, exacerbating the supply gap and causing prices to go up.

El Nino is known as the weather event that creates the biggest change in the global climate. The weather event is causing the planet to warm up for a year or two. Due to El Niño, there is a possibility of drought in Australia, more intense rain in the south of the United States, and a decrease in monsoon rains in India. Last time, a state of emergency was declared in 18 regions for 60 days due to the negative effects of El Nino.

This situation also creates the expectation of warmer, drier weather in coffee and cocoa producing countries, exacerbating the supply gap and causing prices to go up.

According to some news in media, an increase has started on the cocoa side. Prices have increased by 6.3 percent in the last month, while the last one-year price increase is at the level of 36 percent.

There is a similar increase in the coffee market. The price of Arabica coffee is close to the highest level in the last six months. Prices are 32 percent above the lowest level of the year.