El Niño Sets Sights on Agricultural Regions

The El Niño event forming in the Pacific Ocean has already surpassed previous temperature records and is expected to reach its peak later this year, according to the UK Met Office.

A record El Niño could significantly alter weather patterns in key agricultural regions, with Australia, India, and southern Africa at risk of dry weather, while parts of South America, the Mediterranean, and East Africa may see increased rainfall.

The impact on global grain production is not straightforward, as previous strong events did not lead to a decrease in average global yields, although losses were significant in some countries. The 2015-2016 El Niño event saw decreased corn yields in South Africa and wheat in India.

Rising global prices are also a concern, with wheat futures in Paris up 26%, corn in Chicago up 23%, and soybeans by 29% since January 2 to September 22. However, current prices remain within normal historical ranges, and wheat and corn stocks in leading exporting countries remain relatively high.

The Center for Global Development notes that the biggest threat to food markets is not El Niño itself but its possible combination with other factors, such as disruptions to exports through the Black Sea and high energy and fertilizer prices.