El Nino threatens to return, hit global food production

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The El Nino weather pattern that can trigger drought while causing flooding in others is increasingly likely to return this year. (Reuters) The El Nino weather pattern that can trigger drought while causing flooding in others is increasingly likely to return this year. (Reuters)
SummaryThe El Nino weather pattern that can trigger drought while causing flooding in others is increasingly likely to return this year.

The El Nino weather pattern that can trigger drought in some parts of the world while causing flooding in others is increasingly likely to return this year, hitting production of key foods such as rice, wheat and sugar.

El Nino - the Spanish word for boy - is a warming of sea-surface temperatures in the Pacific that occurs every four to 12 years. The worst on record in the late 1990s killed more than 2,000 people and caused billions of dollars in damage.

A strong El Nino can wither crops in Australia, Southeast Asia, India and Africa when other parts of the globe such as the U.S. Midwest and Brazil are drenched in rains.

While scientists are still debating the intensity of a potential El Nino, Australia's Bureau of Meteorology and the U.S. Climate Prediction Center have warned of increased chances one will strike this year.

Last month, the United Nations' World Meteorological Organization said there was an "enhanced possibility" of a weak El Nino by the middle of 2014.

"The world is bracing for El Nino, which if confirmed, could wreak havoc on supply and cause prices of some commodities to shoot up," said Vanessa Tan, investment analyst at Phillip Futures in Singapore.

Any disruption to supply would come as many crops have already been hit by adverse weather, with the northern hemisphere in the grip of a savage winter.

The spectre of El Nino has driven global cocoa prices to 2-1/2 year peaks this month on fears that dry weather in the key growing regions of Africa and Asia would stoke a global deficit. Other agricultural commodities could follow that lead higher if El Nino conditions are confirmed.

BAD BOY

"Production estimates for several crops which are already under stress will have to be revised downwards," said Phillip Futures' Tan.

"Wheat in Australia may be affected by El Nino and also sugar in India."

In India, the world's No.2 producer of sugar, rice and wheat, a strong El Nino could reduce the monsoon rains that are key to its agriculture, curbing production.

"If a strong El Nino occurs during the second half of the monsoon season, then it could adversely impact the production size of summer crops," said Sudhir Panwar, president of farmers' lobby group Kishan Jagriti Manch.

El Nino in 2009 turned India's monsoon patchy, leading to the worst drought in nearly four decades and helping push global sugar prices to their highest in nearly 30 years.

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