Bloomberg: Extreme weather conditions threaten global food markets | Economy

Global food markets are once again being shaken by extreme weather, raising concerns about the vulnerability of agricultural supply chains to climate change.

Recent adverse weather conditions have led to significant shifts in the prices of many commodities, affecting producers and consumers around the world, according to Bloomberg.

Coffee prices are rising

In South America and Asia, Bloomberg said harsh weather conditions have severely affected coffee production.

Brazil, the world’s largest coffee producer, is seeing a decline in its crop, with farmers reporting smaller than usual beans due to drought.

Similarly, producers in Vietnam and Indonesia have also suffered, Bloomberg reported.

The turmoil has sent arabica futures to their highest level in two years, while robusta, a favourite for instant drinks, has hit its highest price since the 1970s.

Italian coffee roaster Lavazza has warned that coffee prices will continue to rise until the middle of next year due to a shortage of beans, the agency reported, citing the company.

The company also pointed to increased costs caused by shipping disruptions, such as those in the Suez Canal, exacerbating the problem.

Chocolate inflation looms

Chocolate lovers may soon see higher prices as unfavorable weather devastates cocoa crops in West Africa, Bloomberg says.

Although chocolate makers have so far been able to protect themselves from the worst of the cocoa price surge by relying on stockpiles, they will soon need to replenish supplies at higher costs.

This week, according to the same source, witnessed a significant decline in the shares of Barry Colbot, a leading Swiss-Belgian chocolate manufacturer, by about 9% last week, due to concerns about whether demand for chocolate will withstand rising cocoa prices.

Grain market volatility

Bloomberg notes that while some crops have benefited from recent climate events, the overall impact has been mixed.

In the United States, for example, Hurricane Beryl brought much-needed rain to corn and soybean fields, sending futures for these crops to their lowest levels since 2020.

However, heavy rains have battered French wheat farms, leading to an expected 15% drop in the soft wheat crop to its lowest level in four years.

The cut threatens to limit exports to key markets in North Africa and the Middle East, while China faces another summer of harsh weather, with drought, floods and typhoons posing major risks to crops.

Varying conditions across the country are threatening production of wheat, soybeans, rice and corn, Bloomberg reported, potentially leading to food price inflation.

The China Climate Center has warned that these extreme weather events are likely to increase in frequency and intensity due to climate change.

Meat consumption shifts

In Argentina, known for its high consumption of beef, economic pressures have caused a noticeable shift toward cheaper chicken.

The Rosario Trade Council reported that demand for beef is expected to fall to less than 45 kilograms per person this year, the lowest level recorded since 1914, according to Bloomberg.

The shift marks the first time Argentina’s demand for beef has been roughly on par with chicken, reflecting a broader trend of consumers looking for more affordable meat options.