El Niño - Heavier rainfall, higher temperatures, higher prices

Will we see heightened coffee prices in the coming months?

Climate.gov refers to a forecast on the heavily predicted El Niño phenomenon coming this summer/fall, giving it a 40% chance of a strong El Niño. This phenomenon will have global impacts, but in the case of coffee, Brazil is the most interesting country to focus on. Brazil is the number one country in terms of coffee production, producing about a third of all coffee produced globally. 

El Niño comes with known effects on the weather, not only concerning temperature, but also precipitation. The southeastern part of South America are usually subjected to heavy rainfalls. What this means for coffee bean farmers in Brazil is that the drying process after harvesting might be delayed, as 90% of the beans are sun-dried in Brazil. However, there are other processing methods that includes hot-air blowers to dry the beans. This will obviously come with a cost as opposed to leaving them in the sun.

As Brazil is the largest producer, even though their Arabica beans are sold at a discount of the futures price, the prices on Brazilian coffee have the influence to change the overall futures price. This means that other producing countries can charge a higher rate for their coffee as well. Due to the El Niño forecasted alone, we could see a rising futures price coming forward. 

Sources: 
https://www.climate.gov/news-features/blogs/april-2023-enso-update-el-ni%C3%B1o-watch

https://www.climate.gov/news-features/blogs/enso/how-enso-leads-cascade-global-impacts