World Food Markets Advised to Brace for Drought, El Niño Highly Likely to Occur This Year

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By Esther Tanquintic-Misa | April 29, 2014 3:11 PM EST

A sign advising motorists of a drought is seen along Interstate 5 near Canuta Creek, California in this February 14, 2014 file photo. REUTERS/Robert Galbraith/Files
A sign advising motorists of a drought is seen along Interstate 5 near Canuta Creek, California in this February 14, 2014 file photo. REUTERS/Robert Galbraith/Files

Food markets around the world are being strongly advised to conduct the necessary preparations as the "boy child' weather phenomenon El Niño has been predicted to highly likely occur this year, 2014.

Australia's Bureau of Meteorology has announced the 70 per cent possibility of an El Niño weather pattern developing in the next few months.

"The likelihood of El Niño remains high, with all climate models surveyed by the bureau now indicating El Niño is likely to occur in 2014. Six of the seven models suggest El Niño thresholds may be exceeded as early as July," the authority has warned. "El Niño has an impact across much of the world, including below-average rainfall in the western Pacific and Indonesian regions, and increased rainfall in the central and eastern Pacific."

Drew Lerner, president at World Weather Inc. said earlier in April the El Niño weather pattern will begin as a mild to weak event and take many months to meet the definition of an El Niño.

Once it fully strikes, prices of soft commodities such as sugar, coffee and wheat will be particularly affected.

A Zimbabwean man, Tendai Rafemoyo, harvests maize from a field in a peri-urban suburb of Mabvuku in Harare, April 10, 2014. The United Nations World Food Program (WFP) recently announced that 2.2 million locals could be impacted by food insecurity caused by a severe drought and resulting in poor harvests, estimated unemployment of around 60% and the restructuring of the agriculture sector. REUTERS/Philimon Bulawayo
A Zimbabwean man, Tendai Rafemoyo, harvests maize from a field in a peri-urban suburb of Mabvuku in Harare, April 10, 2014. The United Nations World Food Program (WFP) recently announced that 2.2 million locals could be impacted by food insecurity caused by a severe drought and resulting in poor harvests, estimated unemployment of around 60% and the restructuring of the agriculture sector. REUTERS/Philimon Bulawayo

"Today we are seeing weather risk creep into the [sugar] market," commodities broker Macquarie said in a note to investors. "The first weather risk is the drought in Brazil. The second risk (though less impactful at this stage) is the growing chance of an El Niño developing in H2 of 2014. El Niños are typically associated with weak monsoons in India, drier Australia and South East Asia, and wetter CS [Centre-South] Brazil - all of which carry bullish connotations for sugar."

While Australia braces for drought and potentially severe bushfires, other parts of the world brace for too much rainfall, especially if it happens in grain-producing areas which could yield poor harvests and thereby push up prices of animal feed. All these would have an impact on grocery prices.

Cattle graze on hay in a landscape that would normally be covered in green grass on the Van Vleck Ranch in Rancho Murieta, California, in this February 12, 2014 file photo. For decades, ranchers from the east have brought their livestock to California, where mild winters and lush natural pastures created prime conditions for fattening beef cattle. No more. In the midst of the worst California drought in decades, the grass is stunted and some creeks are dry. Ranchers in the Golden State are loading tens of thousands of heifers and steers onto trucks and hauling them eastward to Nevada, Texas, Nebraska and beyond. REUTERS/Max Whittaker/Files
Cattle graze on hay in a landscape that would normally be covered in green grass on the Van Vleck Ranch in Rancho Murieta, California, in this February 12, 2014 file photo. For decades, ranchers from the east have brought their livestock to California, where mild winters and lush natural pastures created prime conditions for fattening beef cattle. No more. In the midst of the worst California drought in decades, the grass is stunted and some creeks are dry. Ranchers in the Golden State are loading tens of thousands of heifers and steers onto trucks and hauling them eastward to Nevada, Texas, Nebraska and beyond. REUTERS/Max Whittaker/Files

"This [El Nino] is very important because it could have a huge impact on global grain markets," Nan-Dirk Mulder, a Rabobank analyst, said during a farming conference last week.

According to the Climate Prediction Center, it was in 2009 to 2010 that the last El Niño occurred. Since then a cooling called La Niña and a period of neutral conditions have held on.

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(Photo: / )
A sign advising motorists of a drought is seen along Interstate 5 near Canuta Creek, California in this February 14, 2014 file photo. REUTERS/Robert Galbraith/Files
(Photo: / )
A Zimbabwean man, Tendai Rafemoyo, harvests maize from a field in a peri-urban suburb of Mabvuku in Harare, April 10, 2014. The United Nations World Food Program (WFP) recently announced that 2.2 million locals could be impacted by food insecurity caused by a severe drought and resulting in poor harvests, estimated unemployment of around 60% and the restructuring of the agriculture sector. REUTERS/Philimon Bulawayo
(Photo: / )
Cattle graze on hay in a landscape that would normally be covered in green grass on the Van Vleck Ranch in Rancho Murieta, California, in this February 12, 2014 file photo. For decades, ranchers from the east have brought their livestock to California, where mild winters and lush natural pastures created prime conditions for fattening beef cattle. No more. In the midst of the worst California drought in decades, the grass is stunted and some creeks are dry. Ranchers in the Golden State are loading tens of thousands of heifers and steers onto trucks and hauling them eastward to Nevada, Texas, Nebraska and beyond. REUTERS/Max Whittaker/Files
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