Strong El Niño raises crop risks across the Southern Hemisphere
The El Niño developing in the Pacific Ocean has already exceeded temperature levels seen during previous similar events, with its peak expected later this year. According to the UK Met Office, sea surface temperatures in the central equatorial Pacific have reached record levels.
El Niño typically increases the risk of dry weather in Australia, India and southern Africa. At the same time, parts of South America, the Mediterranean and East Africa could receive more rainfall.
Its impact on global grain production remains uncertain. Previous strong El Niño events did not reduce average global grain yields, although significant losses occurred in some countries, including corn in South Africa and wheat in India.
Already elevated global prices add another risk. From the beginning of the year through September 22, Paris wheat futures rose by 26%, Chicago corn by 23% and soybeans by 29%. At the same time, wheat and corn stocks in major exporting countries remain relatively high.
In the coming months, markets will closely monitor weather conditions in Australia, India, South Africa and South America. The greatest risks to agricultural markets could emerge
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