El Nino could be what we need in 2015 and beyond The winter weary North American friends may be able to find some solace in the following report El Nino Warnings Trigger Fears of Rising Commodity Prices Wednesday, March 12, 2014 01:14 PM By: Dan Weil Three official warnings in the last week that an El Niño weather pattern may be emerging have sparked concern that food and energy prices may surge. El Niño consists of rising surface temperatures in the Pacific Ocean. It occurs naturally and can create both drought and floods in different parts of the world, the Financial Times reports. Its certainly front of mind for everyone, from commodities analysts to farmers, Tracey Allen, a commodities analyst for Rabobank in London, told the paper. Everyone is watching it because it could have such a significant bearing on products. The last strong El Niño came in 1997-98, with the United States suffering billions of dollars worth of agricultural damage, according to the FT. The prospects of a potential El Niño have already provided some weather risk price support to cocoa and palm oil, Kona Haque, agricultural analyst at Macquarie in London, told the paper. U.S. officials say its premature to panic. Its still far too early to guess how strong this event will be, assuming it does develop, Mike Halpert, of the U.S. Climate Prediction Center, told the FT. There is a good side to El Nino. It means that the Atlantic hurricane season will be rather weak because it cant stand the competition, Kevin Trenberth, senior scientist at the National Center for Atmospheric Research, told CNN. El Nino could increase wind shear in the Atlantic, destroying potential hurricanes. moneynews/streettalk/commodity-prices-el-nino-fears/2014/03/12/id/559136/ FINANCIAL TIMES El Niño warning puts farmers and commodities investors on alert By Pilita Clark and Emiko Terazono Commodities investors and farmers are on alert after the third official warning in a week of an El Niño weather phenomenon emerging that could affect food and energy markets already reeling from extreme weather in many parts of the world. El Niño refers to a warming of Pacific sea surface temperatures that occurs naturally every few years and can trigger drought in some parts of the world and floods in others, depending on its strength. Australia’s Bureau of Meteorology said on Tuesday the tropical Pacific subsurface had “warmed substantially” over the past few weeks, meaning sea surface temperatures were likely to rise in coming months. A recent burst of westerly winds over the far western Pacific was also the strongest seen since at least 2009, the last time an El Niño developed, the bureau said. Its warning comes a week after the US weather forecaster said there was a 50 per cent chance of an El Niño developing this summer and days after Japan’s weather bureau raised its forecasts of such an event. “It’s certainly front of mind for everyone, from commodities analysts to farmers,” said London-based commodities analyst Tracey Allen of Rabobank. “Everyone is watching it because it could have such a significant bearing on products.” The last strong El Niño in 1997-1998 is estimated to have caused billions of dollars worth of agricultural damage in the US alone. Any damage to crops and the rise in food prices could hit poorer countries, some of which are already feeling the effects of higher import prices due to the volatility in emerging market currencies. Analysts said that some commodities had priced in the possible weather impact. “The prospects of a potential El Niño have already provided some weather risk price support to cocoa and palm oil,” said Kona Haque, agricultural analyst at Macquarie in London. Cocoa, which is mainly produced in west Africa, led by the Ivory Coast and Ghana, has rallied more than 10 per cent since the start of the year to a two and a half year high, while palm oil, grown mainly in Indonesia and Malaysia, has gained more than 9 per cent in the year to date. Both west Africa and southeast Asia face the risk of droughts caused by El Niño, as do Australia and India. Other commodities at risk include wheat, sugar, cotton and rubber. A rise in the Pacific sea temperatures would also affect fish catches in Peru, the world’s biggest fishmeal exporter. Fishmeal prices are already at historically high levels due to increased demand from the aquaculture and livestock industries. Any price increases will filter into fish and meat prices as fishmeal is used to feed the multibillion-dollar fish farming industry as well as pigs and poultry. Climate scientists are also watching the El Niño forecasts closely because of speculation it could end a so-called pause in global warming that emerged after the last big El Niño event in the late 1990s. However, US officials said it was impossible to say at this stage what impact an El Niño might have this year. “It’s still far too early to guess how strong this event will be, assuming it does develop,” said Mike Halpert, of the US Climate Prediction Center. “We’ve had a number of weak to moderate, even moderate to strong, episodes during the past 15 years, most recently in 2009/10, and those years did not see big increases in global temperatures.” “The very strong events, like 1997/98, would make a record warm year, probably in 2015, more likely,” he added, but it was far too early to predict this would happen. ft/intl/cms/s/0/77275cf0-a8f9-11e3-9b71-00144feab7de.html?siteedition=intl#axzz2vjzfe7YS
Posted on: Sun, 23 Mar 2014 22:22:46 +0000
Trending Topics
Recently Viewed Topics
© 2015