Commodities: El Niño might be under way

The El Niño weather phenomenon has again emerged in the Pacific Ocean and could last until early winter, Japan Meteorological Agency said last weekend. El Niño results in the warming of surface waters across the tropical Pacific Ocean roughly every five years and can cause hurricanes, floods or droughts.

The Australian Bureau of Meteorology said although El Niño development stalled during the second half of July, “over the past fortnight indicators such as the Southern Oscillation Index and trade wind strength have shown renewed trends that are consistent with the early stages of an El Nino event.”

The areas covered are vast, from Australia to India throughout southeast Asian countries. Many agricultural crops could be impacted, including wheat, rice, corn, rubber and coffee. The damage will depend on the duration and intensity of the El Niño event.

These concerns come on top of those related to the drought currently affecting the United States, the worst in half a century, weather-related impact on Russian grain and Ukrainian wheat. Prices of agricultural commodities soared since the beginning of June, raising fears of a new global food crisis.

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3. Parched Kansas Wheat Boosting Prices for Panera Bread, Wheaties
4. Commodities Sink on Fears China Will Act to Curb Inflation – WSJ.com
5. Argentina: Drought after Flood