How climate change impacts soft commodities

Climate change continues to pose a significant threat to the global commodities market, particularly affecting soft commodities such as cocoa. The United Nations Intergovernmental Panel on Climate Change (IPCC) has issued warnings about the risks posed by climate change to food security, food equity, and food and water supply. However, the impact of climate change on commodities, specifically cocoa futures, is becoming increasingly concerning. In a recent interview with Tedd George, Chief Narrative Officer at Kleos Advisory, CNBC Africa explores the current outlook for cocoa and other commodities in the face of climate change. George highlights the short-term and long-term implications of climate change on cocoa production, emphasizing the fragile nature of the crop and the potential for disruptions in future production. While current cocoa prices may be low due to bumper crops in key producing regions such as Ivory Coast and Ghana, the unpredictable nature of climate change poses a significant threat to the sustainability of cocoa farming. Extreme weather events such as droughts and heatwaves could have devastating effects on cocoa production in the coming years, leading to a decline in output and potential price increases. George emphasizes the importance of sustainability in cocoa production and the need for proactive measures to mitigate the impact of climate change on commodities. Looking ahead, George expresses concerns about the future of cocoa production in West Africa, citing the challenges faced by coffee producers in Brazil due to climate-related issues. The recent spike in coffee prices due to severe weather events in Brazil serves as a cautionary tale for cocoa producers, highlighting the vulnerabilities of the commodities market to climate change. Beyond the implications for commodity markets, George raises the issue of food equity and food security in the face of climate change. He underscores the importance of promoting local food production and reducing reliance on imported foods, which can be costly and unsustainable in the long run. By prioritizing the cultivation of easily produced crops such as cassava and millet in regions like West Africa, food security can be enhanced and vulnerabilities to global supply chain disruptions can be mitigated. Overall, the conversation around climate change and its impact on soft commodities like cocoa serves as a sobering reminder of the urgent need for sustainable agricultural practices and proactive measures to address the challenges posed by a changing climate.