If La Niña happens this year, we can expect heavier rainfalls in Australia, and South-Eastern Asia but more drought in the United States and the South-East of Latin America. This will affect nut production and market prices. Peanut crops of the American continent are likely to experience drier conditions while more rain is expected in cashew nut areas. 

Humid conditions can increase disease pressure on crops. Drought can imply stress if fields are not irrigated, but it can also enhance the impact of certain pests. As the frequency of ENSO events increases over the years, farmers adopted strategies to attenuate the effects of El Niño or La Niña events on production. Multiple tools have recently been developed to help farmers decide when to plant crops and which phytosanitary treatment to apply according to the forecasted weather conditions. 

In a nutshell, La Niña could be happening this fall. It would have an impact on the production of commodities in the coming year at least and international trade. But market trends are difficult to predict for several reasons:

• Although La Niña seems likely to happen this year, it is not here yet, and things can always evolve differently than expected.
• Duration of the phenomenon is paramount to consider when forecasting the impact on agricultural production. But even if La Niña occurs this year, it is still uncertain how long it would persist. Last week, the International Research Institute from Columbia University estimated that there was a “55% chance La Niña could continue through winter in the Northern hemisphere”. This is still a relatively low probability, but we will keep monitoring it.
• As long as catastrophic events, such as floods and extreme drought, are avoided, food production is nowadays more resilient to weather changes. Farmers dispose of multiple tools and data to assist them in anticipating incidents that could massively affect production. 
• The current Covid-19 pandemic seems to have much more unpredictable and impactful effects on the supply and demand of commodity products than the La Niña phenomenon. In a previous post, we tried to summarise the numerous consequences of Covid-19 on international markets. It is still uncertain how the health situation will evolve in the coming weeks & months, and the short- & long-term effects it could have on production, distribution and consumption of commodity products. Therefore, La Niña’s impacts remain more predictable, although many variables could change and impact the markets. Nevertheless, a combination of Covid-19’s effects and La Niña would be a unique situation with probably many unforeseen and unexpected consequences.

That being said, we will continue monitoring the probability of La Niña and will keep you updated about any important changes regarding the effects it might have on production and, subsequently, market prices.