Climate change rocks agricultural commodity markets

Climate change rocks agricultural commodity markets

AFP

Agricultural commodities such as coffee, cotton and wheat faced sharp price swings this year as output was hit by extreme weather sparked partly by climate change.

According to analysts, volatile weather conditions and temperatures have adversely impacted crop growth, harvest and supply in key exporters.

“The weather has certainly created tightness in the (agricultural) markets,” Sucden analyst Geordie Wilkes told AFP.

That has stoked prices of soft commodities at a time when global inflation is already soaring due to the post-pandemic demand recovery and supply-chain snarl-ups.

Climate change is under the spotlight as global powers at the two-week COP26 summit in Glasgow attempt to reach agreement to slow the pace of global warming.

Brazil, the world’s biggest coffee producer and a major player in corn, was gripped in April by a severe drought, which sent prices briefly spiking on supply woes.

Just three months later in July, the South American giant suffered harsh frosts that pushed coffee prices to multi-year peaks.

Arabica coffee topped $2 a pound - the highest since 2014 - and still remains close to this level.

Elsewhere, southwestern Canada and the northern plains in the United States faced a prolonged springtime drought that damaged wheat production.

Wheat prices were ignited and still