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Worries about all this are already conspicuous in the agricultural commodity market, as the FT’s Susannah Savage reported a few days ago. As west African cocoa producers face an elevated threat of drought, prices of the chocolate ingredient have risen 37 per cent since the start of June. Arabica coffee prices are up 26 per cent, as Brazilian producers anticipate a harvest reduced by excessive heat and volatile rainfall. Wheat production in Australia and rice output in India face serious threats from El Niño’s negative effects on rainfall, according to UN Food and Agriculture Organization chief economist Máximo Torero. Rainfall in India’s crucial monsoon season has so far been more than a tenth below the average level.
Wheat production in Australia and rice output in India face serious threats from El Niño’s negative effects on rainfall, according to UN Food and Agriculture Organization chief economist Máximo Torero. Rainfall in India’s crucial monsoon season has so far been more than a tenth below the average level.
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A blow to Indian production may push up global sugar prices, reckon analysts at Morgan Stanley, while copper mining could be disrupted in Zambia by drought and in Chile, in contrast, by flooding.
El Niño could also interfere with trade logistics — notably if drought in Central America reduces the depth of the Panama Canal, as has happened previously. Auction prices for slots to navigate the canal’s busiest lanes have jumped to record highs, the FT has reported, with factors including new restrictions on passage amid concerns about falling water levels.
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