The approximation of El Niño is raising concerns due to extreme weather conditions that could affect grain production. coffee Robusta type in large producers.
A research unit of Fitch Solutions, mentioned in a report dated May 24 that the expected transition to El Niño in the third quarter of 2023 may reduce coffee production in several countries, including the Brazil.
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Climate scientists predict that the phenomenon, which generally brings warmer and drier conditions than normal to the tropical central and eastern Pacific Ocean, will come even stronger this year.
In addition to concerns about Brazil, production in mega coffee producers, such as Vietnam and Indonesia, must also suffer from this strengthening of El Niño.
El Niño can make the price of coffee rise
As a result of climate change, these events are expected to have an impact on coffee prices. The report highlights that Robusta beans, the most commonly produced, are known for their bitter characteristics, higher acidity and higher caffeine content compared to premium arabica coffee, which is more expensive.
Due to concerns about the supply of Robusta beans and the possibility of higher demand for this type of coffee, it is prices of instant coffee and espressos, which are generally made with robusta beans, are expected to suffer from this pressure.
This is because consumers may look for cheaper substitutes for arabica coffee, which increases the demand for Robusta.
According to Shawn Hackett, an expert on agricultural commodities, Southeast Asia experienced record temperatures in mid-May. In addition, the region has shown an increasing preference for Robusta coffee over Arabica coffee.
As a result, the demand for Robusta coffee is rapidly increasing. These trends have significant implications for the coffee industry in Asia, influencing consumption patterns and the market for agricultural commodities.
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