If the last El Niño is any indication, nonfuel commodity prices could rise in the months ahead. According to the International Monetary Fund, nonfuel commodity prices jumped an average 5.3% in the 12 months following the announcement of an El Niño event as the threat of lower production brought on by inhospitable conditions weighed on prices.
Actually, El Nino is already impacting coffee.
“The weather phenomenon known as El Niño has meant many of the major coffee producers have had extremely dry weather since late last year. It is only now that we are beginning to see the damage that it has caused to production. It doesn’t look great so far, and there is a chance that things could even get worse if the dryness is more severe than expected,” adds Seeking Alpha.
iPath Dow Jones-UBS Coffee Total Return Sub-Index ETN
