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El Niño: The Unpredictable Force Shaping Coffee

Glancing over the news recently, both coffee related and more mainstream, has shown a mix of stories looking at El Niño and La Niña, and the effects on global warming expected from the recent shift from one to the other.  

Whilst climate change is driven by human impact on the planet, El Niño, and its sister weather pattern La Niña are a natural phenomenon. Originally described in the 1600’s it was given the name El Niño de Navidad (The Child of Christmas) by South American fishermen due to unusual temperature changes in the waters of the Pacific around Christmas time. 

It forms part of the El Niño-Southern Oscillation cycle (ENSO). Whilst cyclical they are also irregular, with El Niño and its counterpart, La Nina, occurring between every two to seven years and typically lasting between 9 – 12 months. Sometimes this can extend to years. 

As a (very) short note on the difference, El Niño is when trade winds weaken, and warm water moves towards the west coast of the Americas. The Pacific Jet Stream moves south. La Niña sees winds strengthen, with cooler water in the Americas, the warmer water moving towards Asia and the jet stream pushing north. Both are a variation of the norm, where westerly trade winds blow west along the equator and push the warm waters from South America towards Asia.  

As a regular reader of our Market Reports, you will also be familiar with the effects of weather on harvest forecasts which impact market fluctuations. Often here El Niño and La Niña are given as part of the mix that is causing either the ideal or less than desirable conditions for coffee.  

Full Circle

What is less often acknowledged and was discussed out of sessions at our recent Full Circle event was how it affects each country specifically. It’s tempting in our Euro-centric seat to view the phenomenon as having the same effect from Brazil to Costa Rica, but of course when you look on the map you realise how ridiculous that is.  

We spoke to a few different producers in our network to ask what they were expecting from the upcoming changes, and if that was seen as a positive development or a challenge.   

When it Rains it Pours?  

South America is of course home to two big players in coffee, Brazil and Colombia, and what happens there often affects the rest of the global market. None more so than Brazil. Felipe Mesquita de Miranda, agricultural engineer with SMC Specialty Coffees tells us “In São Paulo, southern Minas Gerais, northern Paraná and even part of Mato Grosso do Sul, El Niño interferes more in the transition zones. These would be in spring and fall, forming corridors of humidity that interfere with coffee production. As a result, the summer is likely to be hotter and rainier, causing concerns such as diseases.“  

Compare this to Colombia where the situiation there means less rain. As much as 25%- 45% in the Andean region, according to Hernan Vergara, Director of Speciality Coffee at Racafe, one of the main coffee exporters in Colombia. “It’s the same in all coffee regions in Colombia. The Pacific region has more rain, but in the coffee areas there is less rain.” 

Picture courtesy of National Oceanic and Atmospheric Administration (NOAA). 

It’s the same for Honduran farmers, further north in Central America. They will have less rain too, and as Delmy Regalado, one of the founders of AMPROCAL and General Manager at Beneficio San Marcos adds “For the producers this is bad because the crops need a quantity of water at the usual times to grow and produce with quality.”  

As Hernan in Colombia notes, it can be a fine balance. Less rain can produce a good stimulus for flowering but the plants need some rain to fix the flowers and produce sound buds. “If dry conditions are drastic then there may be flower abortions. If the dry conditions are during the growing of the bean we can have small beans with a lot of low grades. In the dry mill, this means that we will have a lot of lower grades and less supremo. “ 

Flowers need sufficient rain water in order to fix and become cherries

The Effects on Farmers 

The technical assistance team at FEDECOCAGUA talked with a little more specificity around challenges faced by farmers. High soil temps and microclimates caused by prolonged high temperatures and droughts negatively affects flowers the same as in Colombia. However, the effectiveness of fertilizers also decreases. This also affects the microbial activity of the soil. “Fertilizer applications are delayed due to lack of moisture in the soil, with readjustment of fertilization plans at inappropriate times. These volatilize due to high temperatures, or later these are leached by excessive rainfall in short periods of time, affecting low productivity.” This results in high costs due to loss of inputs for fertilization. 

FDECOCAGUA continue “The El Niño phenomenon can also present the late start of the rains, reducing the appropriate time for planting coffee plants” As a result, a lot of losses of planted coffee trees and delays to the development of the new plants to start production can play havoc with yields. 

In Brazil though, they are expecting it to be wetter. This affects the flowers too, but not with a worry around buds being aborted.  “In August we’ll have rain and that’s a big concern because of the flowering.  For coffee growing, this means a lack of water stress” says Felipe, from SMC. Coffee plants require the water stress to produce flowers in the first place. Higher temperatures cause heat stress, especially in areas that are less commonly covered with shade. Increased evapotranspiration further adds to the stresses in coffee. Given that Brazil is the big driver in coffee pricing, then we should all be aware of what is going on over there.  

Quality and Yield Impacts 

It’s not only the swelling of the bean and uneven maturation that can be affected from the change El Niño brings. Felipe had already noted that diseases can be a concern, but FEDECOCAGUA elucidated.  

The effects of the El Niño phenomenon cause damage to the fruit due to excess and/or deficit of rain. This is a risk for the quality during the harvest, affecting the quality of the cup, since there is uneven maturation. In other years, the high temperatures have had an effect of over-ripening in a short period of time, affecting effective collection, and affecting the quality during processing. “ 

“If there is excess humidity during the harvest, fungal diseases appear on the fruits. This causes loss of grain, affecting the yield in the conversion of mature coffee to parchment coffee. Another result of the phenomenon of El Niño is the size of the grain, affecting the yield in the conversion of parchment coffee to green coffee.”  

The weather during the harvest to plays a key role. Back to Delmy, in Honduras. “On the one hand, lack of rain is a positive effect since we can dry it in the sun and without rain it is better, but on the other it is negative because we need water to process the coffee.”  However, if excess rain occurs during the harvest, it also affects the sun-drying process. Quality can be at risk due to the appearance of fungi in wet parchment coffee.  

Looking East 

Looking at the impact on the Vietnam and Indonesian coffee markets, Coffee Trading Academy’s Ryan Delany observes significant differences. He explains, “El Niño’s disruptive influence is particularly pronounced in the context of Robusta coffee crops, which bear the brunt of its impact due to Vietnam and Indonesia’s proximity to the Pacific, where El Niño originates. The El Niño event is historically correlated to shifts in Robusta coffee yields, influenced by diminished rainfall and a prolonged dry season“. For Indonesia, this means a shift in rains from over the land eastward into the central Pacific itself and has previously led to wildfires. These may intensify later in the year leading to agricultural losses.  

This in part is what maintained high Robusta prices this year, with concerns over El Niño developing. Prices hit a 28-year high in June according to the International Coffee Organization, and remain above 2000 US$/MT (Nov 2023). Vietnam’s National Centre for Hydro-Meteorological Forecasting were reported predicting a 70% to 80% chance of El Niño developing mid-2023, extending into 2024. The US Climate Prediction Centre anticipates a higher than 90% chance for El Niño event likely to persist until February 2024. USDA Foreign Agricultural Service (FAS) currently forecasts Vietnam’s 2023/24 production will fall -3.5% to 30.2 million bags.  

Robusta market 1 year to RMX23

Both Vietnam Robusta and Brazil Conilon being responsible for a huge amount of instant coffee, this could well apply pressure on the instant coffee market, which already has seen headlines over pricing in 2023. However, USDA FAS also forecasts that the 23/24 Brazilian coffee harvest will rise by +14.5% to 67.9 million bags, so it’s not all bad news.   

In the second part of their article, Coffee Trading Academy state “The El Niño peak usually takes place during the Jun-Jan timeframe, which coincides with the crucial blooming phase for Indonesia and cherry growth for Vietnam, periods that notably require rain.” 

“El Niño holds a potential of presenting significant challenges to crop development, by limiting or even undermining productive capacity if dry weather is persistent, such as in years of strong El Niño events” It may not be all disastrous. Irrigation can help offset the impact of drought, though of course can be affected by the availability of local water resources.  

Indirect issues 

“Not all countries are so lucky though” says Delmy, from BSM talking about less obvious connotations associated with the weather changes.  

“This phenomenon changes the intensity and direction of the winds. In Honduras before we had winter and summer and now this is not defined. It rains when it is not winter, and it is dry when it is not summer; this is a problem for coffee cultivation because it can no longer be programmed. This will affect the quantity and quality of coffee and other crops. Eighty percent of the families live from agriculture in our area. By not having good quality this will affect prices [and outlook] and people will emigrate to the US meaning we will not have enough labour.”

In Guatemala too, a country already suffering through labour loss from migration, these can exacerbate issues. When there is heavy rain in short periods of time landslides can occur, damaging the access roads. Something we saw in our travels around Colombia too. Flooding can also occur, damaging roads and bridges, affecting the means of transportation for people and coffee. This makes the transport of the product more complicated and more expensive, as well as impacting on day-to-day life outside the business activities. This happened for Guatemala in the ETA/IOTA hurricanes in 2021.  

All these issues impact food security, as it is not just crops that are affected.  

Adverse weather can make roads impassable for small vehicles let alone fully laden trucks

The technical team from FEDECOCAGUA again. “It is possible to have some increased incidence of pests and diseases as the biological cycles of diseases and pests are altered, not being enough control with cultural management, making their production more expensive.” 

Landslides in Colombia

Further Reading 

You can read more about El Niño and La Nina here, from the National Ocean Service website.

A country-specific global overview of the humanitarian impact was published by ACAPS in July (PDF).

Coffee Trading Academy’s insightful look at markets and El Niño can be found here. El Niño Guide for the coffee Market.

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