{"text":[[{"start":7.64,"text":"A strengthening El Niño is threatening to disrupt production of some of the world’s most heavily traded agricultural commodities, driving sharp swings in prices and raising the risk of food shortages and widespread inflation."}],[{"start":21.96,"text":"The weather pattern, which causes severe rains and droughts and typically occurs every two to seven years, has already hit coffee and cocoa prices as investors anticipate crop damage from Brazil to West Africa and south-east Asia."}],[{"start":36.8,"text":"Arabica coffee prices have risen about 30 per cent since early June to $3.12 a pound. The rally included its biggest one-day gain in 47 years."}],[{"start":48.62,"text":"Cocoa has moved just as sharply. New York futures climbed more than 63 per cent from about $3,950 a tonne in mid-June to an eight-month high of $6,455 on July 9 before easing back to $5,600 on Thursday, still more than 40 per cent above the June low."}],[{"start":68.32,"text":"Analysts at Rabobank have pointed to an increasing correlation between coffee and cocoa prices despite their “vastly different underlying fundamentals”, suggesting investors are applying an “El Niño risk premium” across soft commodities."}],[{"start":82.28,"text":"The ECB has calculated that strong El Niño events typically raise global food commodity prices by 9 per cent. Economists at Jefferies warned on Thursday that “in the context of already upward pressure on commodity prices due to the US-Iran war, this effect is likely to be higher”."}],[{"start":null,"text":"
"}],[{"start":100.44,"text":"The US National Oceanic and Atmospheric Administration said last month there was a 97 per cent probability that the current El Niño would persist into spring 2027 and an 81 per cent chance that the phenomenon would become “very strong” between October and December this year, ranking it among the most powerful recorded since 1950."}],[{"start":121.76,"text":"The weather threat is arriving as farmers are already confronting a fertiliser crunch caused by disruption to energy and commodity flows during the Iran war. El Niño “has the potential to ripple through to the broader food and agricultural sector, and ultimately the global economy”, said Warren Patterson and Thijs Geijer, analysts at ING."}],[{"start":142.44,"text":"Fertiliser shortages risk forcing farmers to reduce applications just as crops face drought, heat or excessive rain, leaving plants less able to withstand adverse weather."}],[{"start":151.96,"text":"“Right now, my concern is durum wheat and rice,” said Máximo Torero, chief economist at the UN Food and Agriculture Organization, adding that a combination of El Niño and lower fertiliser usage in Australia, a major wheat grower, and India, the world’s biggest rice producer, was threatening to hit yields. “It’s a compound effect that is dangerous.”"}],[{"start":173.88,"text":"El Niño could push at least 49mn more people into acute food insecurity by the end of 2027, according to the UN’s World Food Programme. “El Niño is a massive threat to the food security of millions who are already vulnerable,” said Carl Skau, WFP acting executive director."}],[{"start":null,"text":""}],[{"start":192.88,"text":"The first physical supply shock from El Niño is already visible in Peru, where anchovy fishing was suspended from May due to unusually warm waters in the Pacific — a characteristic of El Niño — which makes stocks more vulnerable. Fishmeal prices have more than doubled from a year ago, while fish oil prices have more than tripled since July 2025."}],[{"start":215.56,"text":"Cocoa is particularly vulnerable because 88 per cent of production is concentrated in West Africa, Ecuador and south-east Asia, regions generally adversely affected by El Niño, according to Rabobank."}],[{"start":228.4,"text":"Previous strong episodes have coincided with significant losses. Global cocoa production fell 12 per cent during the very strong El Niño of 1982-83, 9 per cent in 1991-92 and 6 per cent in 2015-16. During the 2023-24 event, production dropped 13 per cent and the average seasonal cocoa price rose 122 per cent."}],[{"start":252.68,"text":"The cocoa market has yet to recover fully from successive crop failures, meaning a relatively small reduction in production could trigger an amplified price response. Low soil moisture and weak pod development are already threatening Ivory Coast’s next main crop, while heavy rainfall has increased the spread of black pod disease in Ghana."}],[{"start":271.96,"text":"Coffee markets are also pricing the possibility of a prolonged weather shock. Rabobank said unusually high prices for robusta futures contracts suggested growing concern about an event extending into 2027."}],[{"start":284.12,"text":"Vietnam, Indonesia and India account for most robusta coffee production and typically experience warmer and drier weather during El Niño. Prolonged dryness could deplete the reservoirs used to irrigate Vietnamese coffee trees, damaging flowering for the 2027-28 harvest."}],[{"start":null,"text":""}],[{"start":300.96,"text":"“The risk is that the reservoirs go completely empty during the dry season and then there’s no water to support next season’s crop,” said Carlos Mera, head of agri commodities markets at Rabobank."}],[{"start":312.52,"text":"For Brazil’s arabica crop, the most consistent effect is higher temperatures. Warmer winter weather reduces frost risk, but excessive heat accompanied by uneven rain can stress trees and reduce yields. Traders will be watching the flowering period between September and November, which will determine the potential of the next crop."}],[{"start":332.86,"text":"Sugar production across Asia-Pacific has consistently declined during strong El Niño episodes, according to ING."}],[{"start":338.6,"text":"New Delhi has already banned sugar exports until the end of September. Rabobank said the more severe risk was that a sufficiently large production shock could force India to import sugar. Thailand is also expected to harvest a smaller area after sugarcane became less profitable relative to alternative crops."}],[{"start":358.4,"text":"Brazil could partly offset those losses with a large cane harvest. But excessive El Niño-related rain could interrupt milling and delay the subsequent crop. Citi expects raw sugar prices to rise to 17 cents a pound within three months and 19 cents within a year."}],[{"start":374.72,"text":"Palm oil is also exposed. Indonesia and Malaysia produce more than 80 per cent of global supplies and typically experience drier weather during El Niño events. Rabobank said production risks could emerge late this year and intensify in early 2027 as the delayed effect of moisture stress reduces yields."}],[{"start":393.68,"text":"The emerging weather shock is being intensified by climate change. El Niño is naturally occurring, but now operates against a warmer global baseline that increases evaporation and heat stress. The Intergovernmental Panel on Climate Change has concluded that rainfall variability associated with El Niño and La Niña is very likely to increase later this century."}],[{"start":414.28,"text":"Torero at the FAO said crop losses could then prompt governments to impose export restrictions, transmitting regional shortages to world markets, as happened in the 2023 rice price crisis. When countries face “lower yields and lower production”, he said, “typically . . . they will put on export restrictions, which could create pressure on prices”."}],[{"start":437.4,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1786135722_3461.mp3"}