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Risk of El Nino Rising, Australian Forecaster Says (Update2)
By Madelene Pearson and Luzi Ann Javier
June 3 (Bloomberg) -- The risk of El Nino weather developing this year has increased, Australia?s Bureau of Meteorology said, raising the chance of drought in Australia and parts of Asia, and potentially curbing agricultural output.
The odds of El Nino in 2009 are now likely to be greater than 50 percent, more than double the normal risk in any year, the bureau said today in an e-mailed statement.
?If recent trends in Pacific climate patterns were to be maintained, an El Nino event would be established by mid- winter,? David Jones, head of climate analysis at the bureau?s National Climate Center, said in the statement. Mid-winter is July in the southern hemisphere.
A repeat of severe El Nino weather conditions experienced in countries from the Philippines to Australia in 2002, may curb agricultural production in Asia, helping support a rally that sent wheat futures to an eight-month high this week.
?When the full effects come in, you?re looking at a wheat crop of less than half? the average of 22 million metric tons a year in Australia, Ben Barber, a broker at Bell Commodities Ltd. in Melbourne said. Australia will be the world?s fourth-biggest exporter of wheat in 2009, according to the U.S. Department of Agriculture.
Wheat futures in Chicago gained 22 percent in the two months through yesterday, and on June 1 traded at $6.77 a bushel, the highest since Oct. 2. July delivery wheat was down 0.45 percent to $6.665 a bushel at 11:47 a.m. in Singapore.
Crop Uncertainty
?Dryness in some of the main grain/oilseed growing regions in South America, Western Australia and China will add to the uncertainty regarding crop size,? according to a World Trends International report released June 1.
Global wheat production is forecast to drop 3.7 percent to 658 million metric tons in the 2009-2010 marketing year, from an estimated 683 million tons a year earlier, the U.S. Department of Agriculture forecast in May.
Asia?s production of rice, a staple for half the world, may also decline, as El Nino reduces rainfall, Rolando Dy, an agricultural economist at the Manila-based University of Asia and the Pacific.
?Rice is very dependent on rainfall and irrigation,? Dy said by phone from Manila. ?Other commodities will also be impacted by El Nino including coconut, corn, sugarcane and even aquaculture.?
Production Cuts
El Nino weather conditions occur about every four to seven years and shift weather patterns around the world. The Australian bureau said El Ninos in 2002 and 2006 brought ?widespread and severe? cuts to rainfall in Australia, slashing agricultural output in the world?s largest wool exporter and second-biggest barley shipper.
The El Nino that ended in April 1998 caused between $32 billion to $96 billion in losses globally, according to a United Nations study. It was blamed for droughts and famine in Papua New Guinea, a plunge in Peru?s fish exports, damage to Argentina?s farm production and tornadoes in the U.S.
El Nino, which means ?little-boy? in Spanish, got its name from Peruvian fisherman who noticed that warmer sea temperatures reduced their catch around Christmas. It emerges first in Australia and can take months to develop.
An El Nino occurs when surface temperatures in the Pacific Ocean rise to above-average levels. The phenomenon affects the jet stream, alters storm tracks and creates unusual weather patterns. Moderate to strong El Nino conditions typically bring warmer-than-average weather to the northern U.S. during winter.
?It?s still possible that the recent trends may stall without El Nino thresholds being reached,? the Australian weather forecaster said. ?Such an outcome, however, may still bias the outlook towards drier than average conditions.?
To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net; Luzi Ann Javier in Singapore at ljavier@bloomberg.net
Last Updated: June 3, 2009 00:05 EDT
By Madelene Pearson and Luzi Ann Javier
June 3 (Bloomberg) -- The risk of El Nino weather developing this year has increased, Australia?s Bureau of Meteorology said, raising the chance of drought in Australia and parts of Asia, and potentially curbing agricultural output.
The odds of El Nino in 2009 are now likely to be greater than 50 percent, more than double the normal risk in any year, the bureau said today in an e-mailed statement.
?If recent trends in Pacific climate patterns were to be maintained, an El Nino event would be established by mid- winter,? David Jones, head of climate analysis at the bureau?s National Climate Center, said in the statement. Mid-winter is July in the southern hemisphere.
A repeat of severe El Nino weather conditions experienced in countries from the Philippines to Australia in 2002, may curb agricultural production in Asia, helping support a rally that sent wheat futures to an eight-month high this week.
?When the full effects come in, you?re looking at a wheat crop of less than half? the average of 22 million metric tons a year in Australia, Ben Barber, a broker at Bell Commodities Ltd. in Melbourne said. Australia will be the world?s fourth-biggest exporter of wheat in 2009, according to the U.S. Department of Agriculture.
Wheat futures in Chicago gained 22 percent in the two months through yesterday, and on June 1 traded at $6.77 a bushel, the highest since Oct. 2. July delivery wheat was down 0.45 percent to $6.665 a bushel at 11:47 a.m. in Singapore.
Crop Uncertainty
?Dryness in some of the main grain/oilseed growing regions in South America, Western Australia and China will add to the uncertainty regarding crop size,? according to a World Trends International report released June 1.
Global wheat production is forecast to drop 3.7 percent to 658 million metric tons in the 2009-2010 marketing year, from an estimated 683 million tons a year earlier, the U.S. Department of Agriculture forecast in May.
Asia?s production of rice, a staple for half the world, may also decline, as El Nino reduces rainfall, Rolando Dy, an agricultural economist at the Manila-based University of Asia and the Pacific.
?Rice is very dependent on rainfall and irrigation,? Dy said by phone from Manila. ?Other commodities will also be impacted by El Nino including coconut, corn, sugarcane and even aquaculture.?
Production Cuts
El Nino weather conditions occur about every four to seven years and shift weather patterns around the world. The Australian bureau said El Ninos in 2002 and 2006 brought ?widespread and severe? cuts to rainfall in Australia, slashing agricultural output in the world?s largest wool exporter and second-biggest barley shipper.
The El Nino that ended in April 1998 caused between $32 billion to $96 billion in losses globally, according to a United Nations study. It was blamed for droughts and famine in Papua New Guinea, a plunge in Peru?s fish exports, damage to Argentina?s farm production and tornadoes in the U.S.
El Nino, which means ?little-boy? in Spanish, got its name from Peruvian fisherman who noticed that warmer sea temperatures reduced their catch around Christmas. It emerges first in Australia and can take months to develop.
An El Nino occurs when surface temperatures in the Pacific Ocean rise to above-average levels. The phenomenon affects the jet stream, alters storm tracks and creates unusual weather patterns. Moderate to strong El Nino conditions typically bring warmer-than-average weather to the northern U.S. during winter.
?It?s still possible that the recent trends may stall without El Nino thresholds being reached,? the Australian weather forecaster said. ?Such an outcome, however, may still bias the outlook towards drier than average conditions.?
To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net; Luzi Ann Javier in Singapore at ljavier@bloomberg.net
Last Updated: June 3, 2009 00:05 EDT