Heavy Rains Hit West Africa Cocoa. Is it because of El Nino?

Heavy Rains Hit West Africa Cocoa. Is it because of El Nino?

by | Jun 27, 2023 | Commodities, Weather

West Africa, particularly countries like Ivory Coast and Ghana, is a major producer of cocoa beans, which are used in the production of chocolate. The cocoa production in this region is characterized by two rainy seasons, each associated with specific cocoa crop cycles known as the main crop and mid-crop.

Currently, it is becoming too wet for parts of Ivory Coast. This, plus El Nino fears for potential drier weather later this year is causing a new bull market in cocoa futures.

The Two Crop Seasons for West African Cocoa

Main Crop: The main crop season is the primary cocoa production period in West Africa. It typically starts around October or November and extends through March or April, depending on the specific region. This period coincides with the first rainy season in these areas. The rains provide the necessary moisture for cocoa tree growth and flowering. The main crop is generally larger in volume and higher in quality compared to the mid-crop. Harvesting of the main crop usually begins around May or June, and the cocoa beans are then processed and prepared for export.

Mid-Crop: After the main crop season, there is a brief dry season in West Africa. Following this dry period, the second rainy season begins, usually around April or May, and lasts until September or October. This rainy period is known as the mid-crop season. The mid-crop season is characterized by a smaller cocoa harvest compared to the main crop but is still significant in terms of overall cocoa production. The mid-crop is considered an off-season harvest, and the cocoa beans harvested during this period tend to be of slightly lower quality, due to factors such as increased pest pressure and disease vulnerability. The mid-crop harvest typically begins around August or September.

These two rainy seasons, along with the associated main and mid-crop cycles, contribute to the overall cocoa production in West Africa. They play a crucial role in providing the necessary water and climate conditions for cocoa trees to grow, flower, and produce the cocoa beans that are vital for the global chocolate industry.

Which teleconnections are most important for West African cocoa production?

These three teleconnections above will be key factors in how the West African cocoa crop fares over the next 8 months. Right now, it is El Nino, combined with the warm TNA index that could spawn an active hurricane season in the eastern Atlantic that is driving the wet weather in parts of West Africa.

Warming at NINO12 (near Peru) can often result in a wet summer in West Africa. Typically, this is good for the beginning of the main cocoa crop (the bigger crop). However, incessant cloudy days with too much rain can often occur causing disease issues. That is what is happening now, just like the great El Nino event of 1972.

Will we see a repeat of the great cocoa bull market of 1972? After all, there have already been nearly a 30% rally in cocoa prices this year brought on by stronger global demand and production concerns due to West African farmers having fertilizer issues and being unable to take proper care of their groves.

We invite you to a complimentary two-week free trial to WeatherWealth and learn about the power of weather and how to invest in commodity ETFs, futures, and options based on the weather

Why Potential Flooding Should Return to Brazil Coffee Areas

Why Potential Flooding Should Return to Brazil Coffee Areas

by | Apr 5, 2023 | Coffee, Commodities, Weather

The coffee market collapsed in the last few months

The coffee market was in the doldrums the last month or so, as needed drying weather in Brazil and a decent 2023 coffee bloom pressured prices. We were bearish coffee over $2.00 last October, even in the face of previous weather problems and tight supplies. We predicted the easing of the northern Brazil drought (at that time). We were also concerned about the Brazil Real.

Since then, we began changing our bearish attitude for our WeatherWealth subscribers last week. With La Niña ending and warming in the eastern Equatorial Pacific, a major flood situation is likely for the middle to later part of April. This is just prior to the beginning of Brazil’s coffee harvest.

Learn how to trade coffee and other commodities and get our weather forecast updates, often before the crowd knows about it, here

The drier Feb-March weather tanked Argentina’s soybean crop but helped Brazil’s coffee crop

A return of wet Brazil weather and a stabilizing Brazil Real has helped coffee prices recover

It will be critical for Brazil to dry out otherwise coffee prices could test the $1.90 area again, given such tight stocks.

As the eastern Pacific warms at NINO12, look how we predicted a return to wet April weather, a few weeks ago.

Warming in the eastern equatorial Pacific will help bring flooding to Brazil coffee in the next two weeks.

Indeed weather maps turned much wetter on Wednesday, as we expected. Rainfall this week into next week could be more than 250% of normal.