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A return of the El Nino weather pattern may threaten food output in Asia, theworld's top producer of rice and palm oil, but drierconditions in some areas could also benefit crops such as coffeeand cocoa and keep global prices in check. With memories of the devastating El Nino in the late 1990s stillfresh in their minds, farmers are braced for the return of theweather anomaly, which can bring drought in some places and heavystorms in others. Although forecasters say it is too early to say whether afull-blown El Nino is on the way, several models in Australiaand India show warming of the Pacific Ocean after two straightyears of La Nina that resulted in excessive rainfall. "We are relatively bullish on a number of markets in Q4 ofthis year because of seasonality and if we start seeing dry weatherconcerns affecting the market, it is going to amplify thatbullishness," said Abah Ofon, commodities analyst at StandardChartered in Singapore. Ofon singled out soybeans, palm oil and sugar. Malaysia and Indonesia account for almost 90 percent of theworld's palm oil supplies, while most of the world'srice is exported from Asia. The region also accounts for nearly 40percent of wheat production and the bulk of natural rubber output. Thailand, the world's biggest rice exporter, is also theworld's second-largest sugar exporter afterBrazil. La Nina, which has brought excessive rains in Australia, caused asevere drought earlier this year in Brazil and Argentina, theworld's leading soybean suppliers, lifting U.S. soy futuresto 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 rainin North America which is favorable for summer cropdevelopment," said one Melbourne-based commodity analyst. El Nino, which means "little boy" in Spanish, is drivenby an abnormal warming of the eastern Pacific Ocean. It can createhavoc in weather patterns across the Asia-Pacific region. The last severe El Nino in 1998 killed more than 2,000 people andcaused billions of dollars in damage to crops, infrastructure andmines in Australia and other parts of Asia. La Nina is less famous and less destructive than El Nino, which hasthe opposite effect of warming the waters of the Pacific. Spook markets "Early talk of El Nino weather could spook the market andtrigger panic demand should this weather risk crystallize,"said Ofon at Standard Chartered, referring to the sugar marketwhich is at a 20-month low due to ample global supply. But coffee and cocoa could thrive this year after being hit byheavy rains last year. Vietnam and Indonesia, the world's toprobusta producers, account for nearly a fifth of the world'scoffee crop. Indonesia accounts for 10 percent of global cocoaoutput. In Brazil, the world's largest coffee producer, the cropfaces a smaller risk of frost this year because of the likelihoodof El Nino, which brings higher-than-normal rains and moisture tothe coffee belt. Early dryness in Australia Australia's weather bureau said models indicate the tropicalPacific Ocean may continue to warm over the next six months. "All the models are consistently warming up," saidAndrew Watkins, manager of climate prediction at the AustralianBureau of Meteorology. "Given what we see at the moment,going beyond July, there is probably equal likelihood of neutral orEl Nino conditions at this stage." Malaysia, the world's second-largest palm oil producer, couldsee lower production in 2013 if the El Nino results in poorrainfall. "There is a 50-50 percent chance of El Nino developing, ifthat happens in the second half of 2012, we should see Malaysianproduction falling next year," said Ling Ah Hong, anagronomist with Ganling in Malaysia. "I would project atleast a 10 percent decline in Malaysian palm oil production in 2013in that case." In Australia, farmers are already facing dry weather which isdelaying wheat planting. "Southeast Australia has been quite dry and it is a bit of aconcern," said one analyst. "If we had El Nino it willcertainly result in below average rainfall for the growing seasonfor winter crops, predominantly wheat, barley and canola." Chinese authorities are keeping their fingers crossed as farmersgear up to plant the world's second-largest corn crop.Adverse weather could boost US corn futures, with China emergingas a key importer in recent years. In India, where farmers are banking on another near-record ricecrop to keep the momentum of exports, forecasters are predicting anormal monsoon season. "An absence of El Nino in the first half of the monsoonseason helps planting of summer crops and also aids initial growthstages," said S. Raghuraman, a New Delhi-based analyst."Initial forecast of India's weather office rules outthe possibility of a drought year as the monsoon rains are expectedto be average." Thailand has entered the rainy season, but a change in the weatherpattern could harm the crop after some rice fields were damaged inthe dry season. The Thai Meteorological Department sees a short dryspell in June. "There were some rice planning areas outside the irrigatedareas that were destroyed during the dry season that ended inApril," said Somchai Baimuang deputy director of thenation's meteorological department. "But there wereminimal damage.". We are high quality suppliers, our products such as PCB Depaneler , PCB Separation Manufacturer for oversee buyer. To know more, please visits PCB Depaneling.
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