Nina weather system could roil global food production, sending prices higher, as potential droughts and floods bring the upheaval to a suite of key agricultural commodities from South-East Asia to South America.
The highly anticipated phenomenon has officially formed, the US Climate Prediction Center said Thursday, after the last significant La Nina event occurred in 2011.
During that period, upheaval in commodity production led to a steep increase in world food prices, with the United Nations Food & Agriculture World Food Price Index surging to a record in February 2011, up 37 percent from the end of 2009.
La Nina typically affects a broad range of farm commodities, as it brings above-average winter-spring rainfall in Australia, particularly across eastern, central, and northern regions, as well as in South-East Asia, with the potential for flooding.
It can also dry out the southern US through winter, bringing cooler temperatures and storms across the north. In South America, croplands in Argentina can become arider, with drought possible across parts of Brazil.
The weather phenomenon disrupts production of a broad range of agricultural produce, such as soybeans, corn, rapeseed, sugar, coffee, and rubber said Bloomberg Intelligences Alvin Tai.
Feed crops scenario
Wheat
The 2010-11 La Nina brought Australia’s wettest two-year period on record, according to the country’s Bureau of Meteorology, and with it a strong 2011-12 winter wheat crop. This season, the crop could climb 78 percent year-on-year to 27 million tons, the USDA FAS said in July.
“A wet spring will support pasture development and grain fill for the winter crop,” Rabobank said in its September agribusiness report. However, if wet conditions continue into harvest, it can reduce crop quality.
A late-season La Nina is unlikely to have any impact on the current winter crop in Australia, forecaster Abares said in its June outlook. The country’s harvest of grains including wheat and barley is due to start within weeks.
La Nina may also exacerbate a bout of dryness in Argentina, jeopardizing what was supposed to be a record wheat crop in one of the world’s top exporters.
Soybeans
Soya growers in the US might escape damage, with harvests typically complete by November. “Brazilian soya may be more at risk if drought and high temperatures weaken conditions for planting, which stretches from mid-August to mid-December,” said Tai.
The US, Brazil, and Argentina account for about 80 percent of soybean production and smaller harvests can raise prices, according to Tai. In the 2011-2012 season, Brazil’s soy production declined 12 percent.
Cotton
“For cotton, drier-than-normal conditions in southern and western Brazil and northern Argentina could have a negative impact on crops there, while more rain could benefit Australian fiber,” according to Donald Keeney, senior meteorologist with Maxar in Gaithersburg, Maryland.
Source: businessline
