Super El Niño Brings Crop Impact into Focus

A strong super El Niño has begun, and its impact on crops is expected to be most pronounced between September and December.

According to Bertrand Oesterle, Vice President of Clearing and Execution Sales at StoneX in London, the heatwaves that have already affected parts of Europe, Ukraine, and Russia are just the 'opening moves' rather than the main event. He notes that the gap between a weather event and its supply effect is what separates current wheat and vegetable oil supplies from the tighter picture forecast by the Food and Agriculture Organization.

The FAO has warned that El Niño may reduce crops worldwide and contribute to food inflation over the next three to six months. Oesterle specifically points out that India is expected to plant a lower wheat area, while Malaysian and Indonesian palm oil production faces heat risk.