La Nina occurrence rate has increased! Coffee and other prices will continue to rise, Brazil's Robusta is expected to overtake Vietnam

Recently, the World Meteorological Organization WMO released a report saying that the El Niño phenomenon that triggers extreme weather events will weaken and turn into La Niña phenomenon later this year. La Nina's "return" may make the world cold after experiencing record temperatures.

According to the World Meteorological Organization, neutral conditions are equally likely (50%) to transition to La Niña, but the probability of La Niña occurring increases to 60% between July and September and to 70% between August and November.

The Deputy Secretary-General of the World Meteorological Organization said that the current end of the El Niño phenomenon is not unexpected that the long-term climate change process will be suspended. Due to the emission of greenhouse gases, the earth will continue to warm. In addition, due to the extra heat and moisture in the atmosphere, the next weather will become more extreme.

In the latest report, it is pointed out that there will be more abundant rainfall in Australia, West Africa and Asia, and the number of tropical cyclones (typhoons) will increase, which will benefit the growth of wheat in Australia and palm oil, cocoa and coffee in Asia and Africa.

But on the other hand, there will be a situation in the Americas, resulting in a significant drop in crop yields, especially in southern Brazil, which is the main growing area of Brazilian soybeans, coffee, corn and other crops.

Moreover, in recent times, due to weather factors, the international prices of coffee beans, cocoa, wheat and other crops have remained high. If the unfavorable factors caused by climate change in the second half of the year intensify in the world's major producing areas, the prices of agricultural products may be further increased.

To this end, Brazil has vigorously developed the Robusta coffee industry in recent years. It is reported that Brazil's Robusta production is expected to reach 21 million bags (60 kg/bag) in 2024, second only to Vietnam's valuation of 24 million bags. It is also said that Brazil is expected to surpass Vietnam in 2027/28 and become the world's largest Robusta coffee producer.

According to local reports, Brazil's traditional Robusta producing areas, such as Minas Gerais, have begun research on Robusta coffee cultivation. Under good conditions, coffee yields can reach 120 bags per hectare.

In addition, La Niña phenomenon may impact global trade. Earlier, the National Oceanic and Atmospheric Administration had considered the impact of La Niña phenomenon when predicting this year's Atlantic hurricane season. It is expected that there will be 4 to 7 hurricanes in the Atlantic Ocean from June to November.

The Gulf of Mexico is a common landfall for Atlantic hurricanes. Offshore oil production in the Gulf of Mexico accounts for 17% of the total U.S. crude oil production. More than 45% of the total U.S. refining capacity is located along the Gulf Coast. If a hurricane destroys the infrastructure of the Gulf of Mexico, it may lead to a rise in global crude oil prices.

International shipping is a transportation method that relies heavily on fuel. If international crude oil prices rise, it will bring huge cost pressure to the shipping industry and shipping freight rates will rise.