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Scott Patterson • April 24th, 2024.
What do coffee, cocoa, and olive oil all have in common? You might be able to find them in a fancy coffee or chocolate beverage in some parts of the world, but the more important connection is that they are facing significant supply chain issues. This is due to extreme weather and unfavorable growing conditions. As the Earth continues to warm, the best conditions for plant growth will be less consistent. Harvests of key crops and commodities will be impacted, leading to less availability. When scarcity occurs and drives up pricing, consumers feel the crunch on their wallets.
There are two main types of coffee beans grown worldwide, Arabica and Robusta.
Arabica is very popular because it tastes better and has less caffeine. It requires very specific growing conditions, however. These types of beans grow best above 600 meters on mountaintops and in the tropics. The ideal temperatures for Arabica bean growth are 18 – 22 C (64 – 72 F). It’s very possible this will become a limiting factor as global temperatures continue to increase.
Robusta is, in a sense, more robust. It can grow in more locations from sea level up to 600 meters and prefers temperatures from 22 – 28 C (72 – 82 F). This will be more adaptable as the world continues to warm. Unfortunately, Robusta is less popular because it is more bitter, has almost double the caffeine content, and is used more in instant coffees and as a blend.
The Bean Belt is a west-east band between 20 deg N and 20 deg S
where conditions are favorable for coffee beans to grow.
Coffee beans are grown in what is known as the “Bean Belt”, an area that wraps around the world between 20 degrees North and 20 degrees South latitude. This includes about 25 countries that actively grow coffee.
Brazil is the biggest coffee producing country in the world, and primarily grows Arabica.
The leading coffee producer and the largest Arabica coffee bean grower is Brazil.
However, they still have some small areas where Robusta is grown,
both near the Atlantic Ocean, and interior Rondonia.
Since the El Niño and the IOD pattern took over in 2023, Brazil has been experiencing a severe drought that has not improved. Even with the El Niño officially over, the effects will continue to linger through June and July. Additionally, a combination of a weak positive IOD and the MJO will lead to overall dryness with wild swings in rainfall at times, but not enough to make major changes to the drought. With the IOD ending by October, it is possible that rainfall will not pick up until that point, after this season’s coffee is harvested.
Vietnam, as the second largest producer of coffee in the world, grows mostly Robusta with an increasing push to grow Arabica. As you can see, most Robusta is grown in the southern end of the country at lower elevations. In the north, Arabica makes up 3% of the coffee production and is grown on small farms in small portions of the circled region.
As you can see, both Thailand and Laos also produce coffee beans. This includes Robusta and Arabica. While Brazil and Vietnam are the leaders in coffee production, there are 23 other countries that produce coffee. These countries include Columbia, Indonesia, Honduras, Ethiopia, and India.
Coffee production in SE Asia, with Vietnam leading
the world in Robusta coffee.
Cocoa beans are facing a similar problem to coffee. The primary region for cocoa production is in the Côte d’Ivoire or Ivory Coast in western Africa. Other countries such as Brazil, Peru, Indonesia, and Mexico are also exporting cocoa beans and cocoa butter.
The global El Niño weather pattern is known by farmers to disrupt the growing season by bringing drought and heat to the tropical regions. Farmers in western Africa experienced shifting and short-lived rainy periods that were different from normal. This led to heat, drought, and a kind of disease called black rot. Due to this climate volatility, it resulted in much lower cocoa production. The shift in pricing has been acutely felt by producers and consumers as global demand increases year-on-year.
Olive oil is produced on hot, dry hillsides along the Mediterranean coasts – far from the cocoa and coffee trees in the jungles of Africa and South America. Unlike the tropics, olives enjoy less rain, similar heat, and some cold during winter. Olive trees prefer shallow, drier soil, but still require over 40 liters or 11 gallons of water per week, per tree. Irrigation can help for drier times, but there is only so much water available. Extended drought can take its toll, as is the current situation for many olive farmers.
Olive oil is often referred to as one of the healthiest oils for people to consume, especially extra virgin olive oil, which is unrefined and cold-pressed. Once the olives are harvested, they are crushed into a paste and then this paste is pressed to separate the oil.
The main issue for the supply chain has been the drought in the Mediterranean. Drought has overwhelmed the ability of irrigation systems to keep up with water requirements. This has ultimately led to a lower harvest of olives and a sky-rocketing price for olive oil.
El Niño didn’t really get going worldwide until the last quarter of 2023, at least atmospherically. Technically the El Niño, on paper and in the ocean, started between June and September. There were many other weather patterns and pockets of very warm sea water possibly interfering with the El Niño.
One of those, the Indian Ocean Dipole or IOD was in a very positive phase, which led to extreme drought conditions between June and December. This affected large swaths of land around the world, except Antarctica. The IOD ended in December and, for many areas, the rain did return. For other areas, the El Niño then started to have more influence with rainy seasons offset by periods of intense heat and drought. This led to poor production of cocoa, coffee, and olive oil, among many other crops.
Dry weather to end 2023 dominated many growing regions of the world.
Above normal precipitation occurred here and there.
Overall, there were more areas of dry compared to wet.
Most people have heard by now that the El Niño will be a one-and-done event, with La Niña expected to return this year. What has not been spoken about much is that La Niña may be delayed at the atmospheric level much like last year’s El Niño. This remains true, even as ocean temperatures cool down. For the second year in a row, the Indian Ocean Dipole or IOD is predicted to be in a positive phase, but will be much weaker than last year. Positive IOD patterns go hand-in-hand with El Niño, but not with La Niña. So the formation of the IOD will likely delay the start of the La Niña until August at the earliest, but possibly as late as October.
Most crops along the Equator and in the northern hemisphere will already have been harvested before the La Niña begins. In the southern hemisphere, many seeds will be planted before the La Niña starts up. The soil may be dry and growing conditions overall will be challenging, due to the drought. When La Niña does start, wetter conditions will return for many southern hemisphere crops during the 2024-2025 wet season/summer.
Possible scenario for a wet, cool July to November for the
Mediterranean Sea, and alternately hot and dry in northern Europe.
The one ray of hope, especially for olives, will be this; when there is a positive IOD in place in the northern hemisphere summer, then a positive NAO or North Atlantic Oscillation is more likely. A +NAO in the summer has been known to bring above-normal rainfall to Greece, Italy, Morocco, Spain, and basically the entire coastal Mediterranean. It will be a close call as to whether this occurs and if there is enough rain in time for the harvest.
Global warming will continue for the rest of our lives. The oceans will continue to warm, leading to anomalous areas of extremely hot water temperatures. As the oceans warm, the regional and global weather patterns will become more chaotic, more sudden, and more extreme. This will lead to even larger swings in the week to week and month to month weather. The window for prime growing conditions will never be the same. Adaptation will be necessary for the success of crop production.
ClimateAi can help businesses navigate and take action in the face of climate volatility sub-seasonally, seasonally, and in the long term. Contact us so your business can make the best plan for crop and commodity production to become more climate resilient.