El Niño Forecast Brings Higher Food Prices Ahead

The Australian food market is bracing for higher prices due to an El Niño weather event that could push costs up by 30% this year. The Bureau of Meteorology forecasts El Niño will peak in late spring or summer, reaching levels above the warmest observed since reliable records began in 1950.

Michael Harvey, a consumer food analyst at Rabobank research, says hot and dry weather in key growing areas in eastern Australia is a major concern for food pricing over the next 12 months. The predicted extreme weather will likely impact crops such as wheat, leading to higher costs.

The Food and Agricultural Organisation has reported rising global commodity prices due to weather-related threats. Harvey notes that there are already signs of risk in the food system, with a potential for food inflation at the consumer end.