El Nino emerges, raising fears over food prices

TOKYO,  (Reuters) – An El Nino weather pattern is underway and will last until winter, Japan said yesterday, foreshadowing disruptive conditions that could harm crops from Australia to India at a time of rising fears about global food supplies.

Corn prices have surged more than 60 percent in the past two months as the United States reels from the worst drought in more than 50 years, while global soy supplies are also tight after drought in South America.

Data suggested the El Nino phenomenon had emerged, the Japan Meteorolo-gical Agency said, referring to conditions in the equatorial Pacific.

“The chances are high that the El Nino phenomenon will be maintained until the winter,” the agency said in a statement.

Adding to worries, the U.N.’s Food and Agriculture Organisation said on Thursday the world was closer to a repeat of a 2008 food crisis because of a spike in food costs.

The big unknown is how intense and how long the developing El Nino phenomenon will be. An intense El Nino can cause widespread drought in Australia, parts of Africa, Southeast Asia and India, but also bring rains to other parts of the globe.

While it can boost corn and soy crops in South America, wheat harvests can be devastated in Australia. Coffee, cocoa, rice and sugar output in Southeast Asia can also be hit.

Officials said El Nino could kick in at the end of the Indian monsoon in September, hurting winter wheat, rapeseed and chickpea crops.

Drier weather would be good for China’s autumn grain growing period, mostly corn and soybean, which accounts for more than 70 percent of the country’s total grain output, a senior Chinese meteorological official said.

El Nino is a warming of sea-surface temperatures in the equatorial Pacific that occurs every four to 12 years. It is the opposite of the very closely related La Nina pattern, which often triggers floods in Australia and parts of Asia. Intense back-to-back La Nina episodes occurred during 2010-12.

The U.S. Climate Predic-tion Center, part of the National Oceanic Atmos-pheric Administration (NOAA), also warned on Thursday that an El Nino was almost certain to occur over the next two months.The last severe El Nino in 1998 caused drought in Australia and Southeast Asia, withering crops and triggering forest fires.

El Nino can also bring warmer, wetter winters in Japan and parts of North America, but any rains might be too late for the parched U.S. corn crop.

Concepcion Calpe, senior economist at the FAO, said she expected a mild El Nino to develop but it could bring “some bad weather which could jeopardize crops in the coming months”.

“We expect more rain in the United States in the coming months, but it will be too late for the maize crop. It is impossible now (for it) to recover,” Calpe said.

“But there is still time for the rains to boost soy yields. We are looking forward to having rain in August and September, that would be great for the soya crop.”

El Nino also generally leads to a decrease in storms in the Atlantic and the Gulf of Mexico, potentially good news for the oil industry whose installations are vulnerable to hurricanes.

The U.S. government forecaster said on Thursday El Nino would bring near-normal to above-normal storm activity. The hurricane season runs to Nov. 30.