Michael Perry, Reuters 8 Jul 09;
SYDNEY (Reuters) - The development of an El Nino weather pattern is increasing and at this stage may be a medium-strength event, but it could take months for it to be officially declared, Australia's weather bureau said.
"We are warming reasonably rapidly. The models tend to suggest something reasonably warm," said Andrew Watkins from Australia's Bureau of Meteorology, which issued its latest El Nino report on Wednesday.
"It doesn't look weak, but then again it doesn't look like it will be at the levels of the 1997/1998 event either," he said.
The last severe El Nino in 1998 killed over 2,000 people and caused billions of dollars worth of damage to crops, infrastructure and mines in Australia and Asia. It struck in the middle of the Asian financial crisis which roiled financial markets.
India, one of the world's biggest producers and consumers of everything from sugar to soybeans, is already experiencing weaker annual monsoon rains. Its faltering sugar crop is a prime reason why sugar prices are at their highest levels in three years.
An El Nino is also a major risk to wheat production in Australia, palm oil output in Indonesia and Malaysia, and rubber in Thailand, Malaysia and Indonesia. Output of palm oil and rubber has already fallen this year due to adverse weather.
"Conditions have reached a point that, should they persist at such levels through the remainder of the southern winter and into spring, 2009 will be considered an El Nino year," said the bureau's report titled "Strong indicators of El Nino persist."
The bureau said there was "very little chance of the current development stalling or reversing."
The 2009 El Nino is developing as the world struggles to emerge from the worst economic conditions since the Great Depression of 1929.
INDIA NEEDS RAIN
El Nino, meaning "little boy" in Spanish, is driven by an abnormal warming of the eastern Pacific Ocean and creates havoc in weather patterns across the Asia-Pacific region.
It is associated with drought conditions in parts of Australia and Asia and wetter-than-normal weather in parts of South America.
"Most of the indicators show an El Nino is developing in the Pacific. I would not say it is accelerating, but it's definitely increased," Watkins told Reuters.
"The warm sea surface temperatures and the warm ocean temperatures, looking at them instantaneously, if you arrived from the Moon you'd probably say that looks like an El Nino," he said.
"I guess we are going fairly close to saying it is an El Nino, but you have to be a little cautious because an El Nino is a longer timeframe thing."
The Southern Oscillation Index (SOI), a key factor in an El Nino and calculated from monthly and seasonal fluctuations in air pressure between Tahiti and Darwin, eased in June to negative 2 from a negative 5 in May.
Malaysian crude palm oil futures dropped as much as 1.7 percent to touch a new 3-month low on Tuesday after news of the indicator easing, with the market viewing signs of a weaker El Nino as positive for the prospects of higher production.
Indonesia, one of the biggest producers of palm oil, is already facing drought.
Australia's weather bureau said the easing in the SOI was only temporary due to a high pressure system near Tahiti or what meteorologists call "weather noise."
"We are fairly confident, given ocean conditions, the SOI will unfortunately start to fall fairly soon. In fact, the latest daily value has started dropping again," said Watkins.
"There is still a clear warming trend nothing has really eased back in the main indicators."
Australia's weather bureau said India's monsoon, the lifeblood of the country's huge farming sector, will likely remain weak according to the Madden-Julian Oscillation index, which gauges the eastward progress of tropical rain.
India's monsoon rains have now covered all of the country, but the country's Meteorological Department said last week that as of July 1, rains were 29 percent below normal.
India's farm economy may be hit by a bad drought if the monsoon remains weak, with the window for plantings closing by mid-July, says a U.S. Agricultural Department attache report.
RUBBER, WHEAT
A brewing El Nino may further dent shrinking rubber supplies in Southeast Asia and keep prices high at a time when demand is struggling to recover from the global financial crisis.
A developing El Nino is also a major risk to wheat production in Australia, but is unlikely to have a material impact on global wheat prices, said Rabobank, a specialist in agribusiness, earlier in the week.
Strong northern hemisphere production would help to make up for any shortfall from Australia in the event of El Nino reducing the harvest in the world's fourth-largest exporter, it said.
Australia's wheat crop is forecast at between 21 and 23 million tonnes this year and industry analysts were confident there would still be a decent crop given strong rainfall in some growing regions in recent weeks.
"If the wet weather continues over the next couple of months, we will be in a better condition to weather a moderate El Nino system," said Richard Koch, managing director of farm advisory firm Profarmer.
It's not long since the country's farmers were battling the worst drought in more than 100 years, resulting in an annual harvest just 10.6 million tonnes in 2006/07.
For more information: www.bom.gov.au/climate/enso/
(Additional reporting by Fayen Wong in Perth)
(Editing by James Thornhill)
