Tomato, Potato And Carrot Prices Double As Analysts Expect Record-Breaking El Niño
Topline
A potentially record-setting El Niño weather pattern could further disrupt prices of common food items, some of which have already more than doubled so far this year, according to a report Wednesday, as concerns surrounding the weather pattern fueled the largest single-day increase for coffee prices in decades earlier this week.
Key Facts
The National Oceanic and Atmospheric Administration, the World Meteorological Organization and the European Center for Medium-Range Weather Forecasts have each indicated the latest El Niño event will likely reach “very strong intensity” and potentially become the most powerful on record, according to a report from GlobalData TS Lombard.
Food prices in Brazil were already under pressure before the weather pattern: Costs for tomatoes (up 103.8%), carrots (103.1%) and potatoes (100.2%) surged, with prices for onions (63.7%), beans (50.8%) and milk (19.1%) also spiking.
El Niño could result in crop losses and planting delays in Brazil for onions, potatoes, tomatoes, carrots, apples and grapes, and lower reservoir levels could disrupt mango, papaya and grape crops, analysts wrote.
A disruption to Brazilian harvests could reduce global supply, pushing up commodity and import costs and potentially feeding into U.S. grocery prices, which have surged in recent years because of inflation.
Brazil has already fulfilled 85% of its annual beef export quota to China, raising the risk of a trade pause that could force Brazil to sell its product elsewhere and disrupt meat prices, analysts said.
El Niño-related climate pressures could also increase Brazil’s inflation by up to two percentage points through 2027, according to the report, with potential impacts on Brazil’s electricity grid.
surprising fact
Coffee futures soared on Monday in their largest intraday gain since 2000, during which the financial services group StoneX said the commodity had approached “meme-stock territory.” Traders anticipate possible harvest disruption from El Niño and premium Arabica coffee supply has tightened, the firm said, but analysts said there is “no actual weather issue” affecting Brazil’s crops and that “quality remains the primary concern.” The average cost for a pound of coffee in the U.S. had already reached an all-time high in April, hitting $9.72, as inflation continued to spike over six years.
key background
El Niño, a weather pattern associated with hotter-than-normal temperatures and irregular rainfall, developed in the Pacific earlier this month, according to NOAA. Brazil is among the most vulnerable countries to the weather pattern, as roughly half of the country’s power supply comes from hydroelectricity. In 2023 and 2024, the weather pattern led to fires that burned about 2.6 million hectares in Brazil and caused record floods in Rio Grande do Sul, displacing some 660,000 people. A United Nations report last year found that coffee price shocks caused by El Niño generally reach consumers after eight months in the U.S., and the effect of raised prices could linger for at least four years as retailers adjust prices gradually. Soaring inflation in recent months has also likely disrupted food prices for Americans: The USDA found in 2013 that higher fuel prices can have “significant” impacts on food prices and volatility, and gas prices jumped nearly 59% annually in May, the most of any item tracked by the Bureau of Labor Statistics.
further reading
Coffee Price Surge Enters ‘Meme-Stock Territory’ Amid Weather Fears
Here’s How A Typical Bag Of Groceries In 2020 Costs Over 50% More Today
This article was originally published onForbes.com
