Asia Faces Threat To Crops If El Nino Unleashed Again

Naveen Thukral and Lewa Pardomuan PlanetArk 11 May 12;

A return of the El Nino weather pattern may threaten food output in Asia, the world's top producer of rice and palm oil, but drier conditions in some areas could also benefit crops such as coffee and cocoa and keep global prices in check.

With memories of the devastating El Nino in the late 1990s still fresh in their minds, farmers are braced for the return of the weather anomaly, which can bring drought in some places and heavy storms in others.

Although forecasters say it is too early to say whether a full-blown El Nino is on the way, several models in Australia and India show warming of the Pacific Ocean after two straight years of La Nina that resulted in excessive rainfall.

"We are relatively bullish on a number of markets in Q4 of this year because of seasonality and if we start seeing dry weather concerns affecting the market, it is going to amplify that bullishness," said Abah Ofon, commodities analyst at Standard Chartered in Singapore.

Ofon singled out soybeans, palm oil and sugar.

Malaysia and Indonesia account for almost 90 percent of the world's palm oil supplies, while most of the world's rice is exported from Asia. The region also accounts for nearly 40 percent of wheat production and the bulk of natural rubber output.

Thailand, the world's biggest rice exporter, is also the world's second-largest sugar exporter after Brazil.

La Nina, which has brought excessive rains in Australia, caused a severe drought earlier this year in Brazil and Argentina, the world's leading soybean suppliers, lifting U.S. soy futures to a near four-year peak last week.

This year El Nino could exactly do the opposite.

"If you have El Nino here there will be typically more rain in North America which is favorable for summer crop development," said one Melbourne-based commodity analyst.

El Nino, which means "little boy" in Spanish, is driven by an abnormal warming of the eastern Pacific Ocean. It can create havoc in weather patterns across the Asia-Pacific region.

The last severe El Nino in 1998 killed more than 2,000 people and caused billions of dollars in damage to crops, infrastructure and mines in Australia and other parts of Asia.

La Nina is less famous and less destructive than El Nino, which has the opposite effect of warming the waters of the Pacific.

SPOOK MARKETS

"Early talk of El Nino weather could spook the market and trigger panic demand should this weather risk crystallize," said Ofon at Standard Chartered, referring to the sugar market which is at a 20-month low due to ample global supply.

But coffee and cocoa could thrive this year after being hit by heavy rains last year. Vietnam and Indonesia, the world's top robusta producers, account for nearly a fifth of the world's coffee crop. Indonesia accounts for 10 percent of global cocoa output.

In Brazil, the world's largest coffee producer, the crop faces a smaller risk of frost this year because of the likelihood of El Nino, which brings higher-than-normal rains and moisture to the coffee belt.

EARLY DRYNESS IN AUSTRALIA

Australia's weather bureau said models indicate the tropical Pacific Ocean may continue to warm over the next six months.

"All the models are consistently warming up," said Andrew Watkins, manager of climate prediction at the Australian Bureau of Meteorology. "Given what we see at the moment, going beyond July, there is probably equal likelihood of neutral or El Nino conditions at this stage."

Malaysia, the world's second-largest palm oil producer, could see lower production in 2013 if the El Nino results in poor rainfall.

"There is a 50-50 percent chance of El Nino developing, if that happens in the second half of 2012, we should see Malaysian production falling next year," said Ling Ah Hong, an agronomist with Ganling in Malaysia. "I would project at least a 10 percent decline in Malaysian palm oil production in 2013 in that case."

In Australia, farmers are already facing dry weather which is delaying wheat planting.

"Southeast Australia has been quite dry and it is a bit of a concern," said one analyst. "If we had El Nino it will certainly result in below average rainfall for the growing season for winter crops, predominantly wheat, barley and canola."

Chinese authorities are keeping their fingers crossed as farmers gear up to plant the world's second-largest corn crop. Adverse weather could boost U.S. corn futures, with China emerging as a key importer in recent years.

In India, where farmers are banking on another near-record rice crop to keep the momentum of exports, forecasters are predicting a normal monsoon season.

"An absence of El Nino in the first half of the monsoon season helps planting of summer crops and also aids initial growth stages," said S. Raghuraman, a New Delhi-based analyst. "Initial forecast of India's weather office rules out the possibility of a drought year as the monsoon rains are expected to be average."

Thailand has entered the rainy season, but a change in the weather pattern could harm the crop after some rice fields were damaged in the dry season. The Thai Meteorological Department sees a short dry spell in June.

"There were some rice planning areas outside the irrigated areas that were destroyed during the dry season that ended in April," said Somchai Baimuang deputy director of the nation's meteorological department. "But there were minimal damage."

(Additional reporting by Colin Colin Packham in SYDNEY, Apornrath Phoonphongphiphat in BANGKOK, Ho Binh Minh in HANOI, Niu Shuping in BEIJING, Niluksi Koswanage in KUALA LUMPUR, Yee Kiat in SINGAPORE and Ratnajyoti Dutta in NEW DELHI)

Why Do El Nino And La Nina trigger Weather Chaos?
David Fogarty PlanetArk 11 May 12;

Why Do El Nino And La Nina trigger Weather Chaos? Photo: REUTERS
A farmer works on a drought-hit paddy field in the outskirts of Chongqing municipality in this March 24, 2009 file photo. La Nina-driven weather from South America to Australia and southern Asia will extend into early 2011
Photo: REUTERS

From record floods to crippling droughts and wildfires, a natural swing in Pacific Ocean temperatures can trigger climate chaos around the globe.

The El Nino ocean-weather pattern is linked to droughts in Australia and floods in parts of South America, while its sibling La Nina causes the opposite, with the two phenomena occurring at irregular intervals.

A powerful La Nina triggered record floods in eastern Australia in 2011 and has been blamed for the withering drought in Texas and severe dry spells in South America, hitting corn and soy crops.

Forecasters say an El Nino might develop later in the year.

Following are some questions and answers on El Nino and La Nina and their billion-dollar impacts on economies.

WHAT IS EL NINO?

El Nino, also called "Little Boy" or "Christ Child", is a warming of ocean surface temperatures in the eastern and central Pacific.

Peruvian fishermen noticed the arrival of the warm waters occurred usually around Christmas. The phenomena, which occurs every three to seven years, led to more rains in that part of South America and a drop in the fish catch.

Strong El Ninos can lead to a dramatic weakening of the trade winds that blow west across the Pacific, triggering drought in Southeast Asia and Australia and parts of Africa.

Some El Ninos can also affect the Indian monsoon by reducing rainfall, threatening crops and livelihoods.

WHAT IS THE IMPACT?

Globally, El Nino can trigger above average rains in northern Peru and Bolivia, drought in Southeast Asia, Australia, India and northeast Brazil, cyclones in the central Pacific and stormy weather in southern and western United States.

El Ninos also tend to cut the number of Atlantic hurricanes but boost the number of storms in the eastern Pacific.

In Australia, strong El Ninos can slash wheat crop output, threaten water supplies by cutting river flows, shrink city reservoirs and dry out forests, triggering bush fires.

Major El Ninos occurred in 1982-82 and 1997-98 but the weak El Nino of 2002-2003 also led to severe drought in Australia.

WHAT IS LA NINA?

La Nina, or "Little Girl", is an abnormal cooling of ocean temperatures in the eastern and central Pacific.

This triggers stronger trade winds across the Pacific that pile up very warm warmers in the western Pacific and around northern Australia, triggering above average rains.

Typically, it also boosts the number of cyclones during the November-April Australian cyclone season.

IMPACTS

Just like El Nino, the weather impact can be global. In Indonesia and parts of Australia, La Nina can bring flooding rains, affecting wheat, sugar, palm oil and rubber crops as well as coal and iron ore mining.

In Argentina and the U.S. Plains, La Nina can trigger drought, hurting the Argentine corn and soy crops and the main U.S. hard red winter wheat crop.

La Nina tends to lead to wind patterns that favor the formation of more hurricanes in the Atlantic and fewer in the eastern Pacific, potentially meaning a greater threat to U.S. Gulf oil and gas assets and cities in Florida, the Gulf Coast and eastern seaboard.

Major recent La Nina events occurred in 1973-76, 1988-89 and 2010-12.

GLOBAL LINKS

Heat from the tropics drives the global climate by fuelling ocean and atmospheric patterns that shift the warmth around the globe. Warm tropical waters fuel evaporation and add moisture to the atmosphere needed for clouds to form.

The rising air also drives atmospheric circulation patterns that help shift the moisture and warmth around to other parts of the globe. So disrupting this pattern can alter the climate elsewhere.

Scientists say climate change might also be adding an extra kick to La Nina and El Nino because warmer oceans add more fuel to storms and weather patterns.

(Sources: NOAA, Australian Bureau of Meteorology, National Centre for Atmospheric Research, Reuters)

(Editing by Ed Davies)