Extreme weather will lead to food price fluctuations in 2025

Analysts believe that extreme weather in 2025 will increase food price volatility, as happened in 2024 with coffee and cocoa prices doubling.

A study by Inverto showed that the sharp increase in prices for some food products in 2024 was caused by weather anomalies. Several organizations (including NASA) called 2024 the hottest on record. In 2025, the trend of increasing temperatures will continue, which will negatively affect crop yields in various regions of the world.

In 2024, coffee and cocoa prices rose the most (by 103% and 163%, respectively), as their growing regions experienced heat and heavy rains. Sunflower oil prices rose by 56% due to drought, which reduced sunflower harvests in Bulgaria and Ukraine. Beef prices rose by 25%, and butter and orange juice prices rose by more than a third.

“In order not to depend on a bad harvest in a particular region, food producers and retailers need to diversify their supply chains,” experts believe.

In December, British authorities said that climate change had led to rising food prices and reduced food availability for the population.

Climate scientists confirm the Inverto study and note that global warming will continue to increase extreme weather events around the world. This will negatively affect crop production and lead to food security problems. For example, last year, severe heat in East Asia led to a sharp increase in the price of rice in Japan and vegetables in China.

In Ukraine, only 30% of the precipitation norm has fallen over the past 5 months, which has already led to an increase in forward prices for grain for the 2025 harvest. The largest trading companies began concluding forward contracts even before Christmas, which indicates a recovery in the market, even despite the risks caused by the war.

Tags: prices, drought, agricultural products