Extreme weather threatens global agricultural markets
Due to the recent occurrence of extreme weather, the production of many agricultural products has been hit, leading to a series of increases in futures prices. This wave of pressure is also expected to be transmitted to the consumer end.
U.S. coffee futures for September delivery on the Ice Exchange climbed more than 7% Monday to more than $2 a pound. Coffee futures have surged more than 21 percent in the past three trading sessions to hit a 6-1/2-year high and are up more than 60 percent this year.
Market participants said the double whammy of a South American winter frost, which has already affected Brazil's coffee crop this year, could cut production and prompt funds and investors to buy long coffee futures.
Most of the world's coffee is produced in Brazil, Colombia and Vietnam, with Brazil being the largest producer.
Due to the recent occurrence of extreme weather, the production of many agricultural products has been hit, leading to a series of increases in futures prices. This wave of pressure is also expected to be transmitted to the consumer end.
U.S. coffee futures for September delivery on the Ice Exchange climbed more than 7% Monday to more than $2 a pound. Coffee futures have surged more than 21 percent in the past three trading sessions to hit a 6-1/2-year high and are up more than 60 percent this year.
Market participants said the double whammy of a South American winter frost, which has already affected Brazil's coffee crop this year, could cut production and prompt funds and investors to buy long coffee futures.
Most of the world's coffee is produced in Brazil, Colombia and Vietnam, with Brazil being the largest producer.
The WMO's recently released "Extreme Summers: Floods, Heat and Fires" report noted that parts of Western Europe, where soil water content is already close to saturation, received two months 'worth of rainfall in just two days on July 14-15. Climate change was the underlying cause of the heavy rains and floods that swept Western Europe this summer, and extreme weather events and natural disasters will increase until mitigation is achieved, said World Meteorological Organization Secretary-General Petre Taras.
While European wheat production is expected to increase this year, some of the harvest may eventually be converted from grinding bread products to feeding farm livestock. That would threaten food exports to North Africa, which is heavily dependent on food imports.