El Niño Set to Send Global Food Prices Soaring

A weather pattern called El Niño is unfolding across the Pacific and could have far-reaching consequences for global food prices. The phenomenon, which changes sea surface temperatures in the tropical Pacific and affects rainfall in different parts of the world, may lead to increased crop risks in countries that produce coffee and oil crops.

Brazil and Vietnam, two of the world's largest coffee producers, are likely to experience changes in rainfall due to El Niño. Indonesia is already facing drought and forest fires that pose a risk to palm oil production.

Nelson Villoria, an agricultural economist at Kansas State University, says commodities most sensitive to this phenomenon include palm and coconut oils, coffee, and fishmeal. He warns that developing countries are particularly vulnerable due to their limited connections to international markets and inability to offset poor harvests or extreme weather events.