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Asian crops face El Niño threat, deepens food inflation worries

SINGAPORE/BANGALURU — Cereal and oilseed crops across Asia are forecast to face hot, dry weather, with meteorologists expecting the El Niño weather pattern to develop in the second half of the year, threatening supplies and heightening concerns over food inflation.

Vast swathes of farmland in Australia, Southeast Asia and India are expected to face higher temperatures, while some growing regions in North and South America are likely to see more crop-friendly weather as there is more than a 50% chance of the El Niño phenomenon occurring, meteorologists said.

The threat from dry weather to food production in Asia comes after grain and edible oil prices climbed to historic highs in 2022 as the Russia-Ukraine war and COVID-19 disrupted world supplies.

“At present, the global grain market is historically tight and thus liable to sudden upward price movements on negative supply-side developments,” Charles Hart, a commodities analyst at Fitch Solutions in London, told Reuters.

“The strains of the COVID era and the poor harvests of 2022 will be felt beyond 2023 as inventories are replenished over time.”

La Niña weather, characterized by unusually cold temperatures in the equatorial Pacific Ocean, has ended and El Niño, a warming of ocean surface temperatures in the eastern and central Pacific, is expected to form during the northern summer, according to US and Japanese weather forecasters.

While La Niña brings cool and wet weather to parts of Asia, El Niño is typically associated with heat and dryness in the region. In North and South America, the weather tends to be favorable for crops during El Niño, although there are likely to still be pockets of adverse weather lingering.

A dry winter in central and western parts of Australia could stress the wheat crop in the world’s second largest exporter of grain.

Australia produced record wheat crops for the last three years, thanks to higher-than-normal rainfall brought by the La Niña weather.

“There is a forecast of warm and dry winter in the central and western parts of Australia,” said Chris Hyde, a meteorologist at US-based Maxar. “If El Niño develops faster than what we are forecasting now, it could get much drier and warmer.”

In Southeast Asia, crucial for palm oil and rice exports, forecasters are expecting slightly below normal precipitation in June-August, although the region has ample soil moisture after heavy rains in recent months. “It will take a while for dry weather in Southeast Asia to have an impact on palm oil and rice production,” Mr. Hyde said.

However, northern and central parts of India, which are already reporting a lack of moisture, are set for below normal rains in the second half of the year, meteorologists said, leaving the most-populous nation vulnerable to lower food output and higher prices.

“In central and northern parts on India, stretching right up to Pakistan, the issue is that the current conditions are opposite to that of Southeast Asia,”

“The region is facing drought, so even slightly below normal precipitation is likely to pose risk to crops.”

Typically, China sees dryness in its corn growing northern region and more precipitation in the soybean producing northeast during El Niño.

For the United States, weather is expected to be favorable for the wheat crop.

“In the southern Plains, parts of Kansas, Oklahoma and Texas in particular, those areas do tend to do a lot better, when it comes to rainfall, in an El Niño year,” Illinois state climatologist Trent Ford said.

Argentina, which is facing a historic drought, could also see improved weather. — Reuters

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