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El Nino's effect on the Cacao Market

In 2023, the weather pattern known as El Nino is having devastating effects in South America. Unusually dry weather has led to water rationing and even power cuts. Colombia's capital city of Bogota is now rationing water for the first time in decades. 

Climate experts say the dry weather in Bogota and much of Colombia is due to warming temperatures in the Pacific Ocean, which are known as El Niño events. This weather pattern happens every two to seven years. And it can have drastic effects around the world, especially in South America says Andrea Devis, an oceanographer in Bogota's Rosario University. 

The current El Niño event began last June. In Chile, dry weather contributed to forest fires in February. And in Ecuador, officials declared a state of emergency last week and began to ration electricity because of the lack of rainfall. Seventy-five percent of Ecuador's electricity comes from hydroelectric plants, but the dams in the mountains are at historic lows. Source


In 2023, El Niño conditions led to prolonged droughts and water shortages in the Central American Dry Corridor, Bolivia, and Colombia, alongside intense rainfall and flooding along the coasts of Ecuador, Peru, and inland Bolivia. These climatic variations led to agricultural impacts, with crops at risk of being lost due to droughts or destroyed by floods. Agricultural losses exacerbated food insecurity, created economic hardships, and heightened the vulnerability of communities reliant on agriculture for their livelihoods. Source


This year, in some regions (of Guatemala), heat soared to unprecedented levels with weeks at 42 degrees Celsius without rain, leading to the death of over 50% of young plants in some areas. Local farmers report a drastic drop in harvests, with crop yields falling to 40-50% compared to last year. Source

El Niño, coupled with climate change, is wreaking havoc on West Africa’s cocoa production, which accounts for 70% of the global supply. Erratic rainfall patterns and increased temperatures in West Africa have caused moisture stress and inhibited the growth of cocoa flowers and pods. These climatic shifts also exacerbated the spread of pests and diseases, making it challenging for farmers to maintain optimal cocoa yields. The situation is impacting not just the chocolate industry but also local and global economies.

Heavy rains have led to the spread of black pod disease, a fungal infection that rots cocoa pods. Black pod disease in cocoa is primarily caused by the fungus Phytophthora spp., which thrives in humid and warm conditions. The disease manifests as dark, water-soaked lesions on the pods, eventually leading to rotting. This has jeopardised both the quality and quantity of cocoa crops, raising concerns about a third consecutive year of deficit for the 2023/24 season.

El Niño’s impact on global crop production is a growing concern for global food security. From staple foods like rice, sugar and palm oil to luxuries like wine and chocolate, the phenomenon is disrupting agricultural output worldwide. This not only threatens food security but also has the potential to inflate global food prices, affecting economies and households alike.


  • For over a decade the cost for a metric ton of cacao circled around $2.500.
  • After poor harvests in West Africa, the price for a metric ton of cacao goes up to $4.200 a ton by December 2023.
  • Financial speculators get involved, pushing the price above $6.000 a ton in February, $9.000 a ton in March, $11.000 a ton in mid-April and $7.700 per ton in June.



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