CNBC's Sam Meredith is reporting on El Niño’s impact on sugar.
The article discusses how the El Niño climate phenomenon, characterized by warmer sea temperatures in the eastern Pacific, is significantly impacting the prices of various commodities like orange juice, cocoa, coffee, and sugar. In 2023, futures contracts for these commodities experienced a sharp increase due to extreme weather conditions and supply concerns linked to El Niño. Carlos Mera from Rabobank highlights the strong correlation between El Niño and higher sugar prices, as it typically results in drier conditions in major sugar-exporting countries. This weather pattern also affects cocoa and coffee, though its impact on cocoa is considered weaker. The article notes that while the rise in cocoa prices hasn't yet strongly affected consumer prices, this is expected to change in 2024. In addition to sugar, orange juice prices soared by 80% in 2023, reaching all-time highs due to hurricanes and diseases affecting citrus crops. The overall trend suggests a significant impact on global food prices and consumer costs in the near future.
(This article was written with assistance from ChatGPT)