El Niño will probably develop as a weak event in late summer or early fall in the Northern Hemisphere, according to MDA Weather Services, while Commodity Weather Group LLC said it may be delayed for several months as the warming of the Pacific Ocean slows.
A drier pattern in Southeast Asia and eastern Australia, and lower monsoon rainfall in India are signs of an El Niño-like event, Donald Keeney, an MDA meteorologist, said by e-mail from Gaithersburg, Maryland. Tropical waters that warmed to near an El Niño threshold about a month ago have cooled and are still neutral, according to CWG’s David Streit.
While the Australian Bureau of Meteorology is keeping an alert for the event, it’s pushed back the start to spring, which starts in September, from as early as July and says a strong one is unlikely. El Niños can roil global agricultural markets as farmers contend with drought or too much rain. Palm oil output in Indonesia, today the largest supplier, dropped 7.1 percent at the time of the last strong El Niño in 1997-1998.
“Certain areas are definitely seeing an influence from the El Niño-like pattern,” Keeney said in a response to questions on July 23. While he expects it to develop in late summer or early fall, it “should only be a weak event.”
Palm oil, cocoa, coffee and sugar are among crops most at risk, Goldman Sachs Group Inc. says. Indonesia and Malaysia supply 86 percent of the world’s palm oil, Vietnam is the biggest grower of robusta coffee, India is the largest sugar producer after Brazil and Indonesia ranks third in cocoa.
Prices of palm may rally to 2,800 ringgit ($882) a metric ton by December if the event occurs from mid-August, Dorab Mistry, director at Godrej International Ltd., said on June 26. Futures traded at 2,283 ringgit today in Kuala Lumpur. Dry weather is helping to curb rice production in Thailand, where the harvest will probably shrink to the lowest level in five years, according to the Thai Rice Packers Association.
“I’m not sure that we will see El Niño develop at this point,” Streit, co-founder of Bethesda, Maryland-based CWG, said in an e-mailed reply to questions on July 23. “It would probably depend on another warm surge in the waters in the mid- Pacific to intensify and move east. This could take several months to translate to the surface.”
India’s monsoon, which provides more than 70 percent of its rainfall, was 24 percent less than a 50-year average since June 1, the Meteorological Department said yesterday. Crops planted in this period may be far below the level of last year, junior farm minister Sanjeev Kumar Balyan said on July 18.
While some rain is expected next week in Indonesia’s central and northern Sumatra, Peninsular Malaysia and East Malaysia, precipitation should be limited in southern Sumatra, Kalimantan, and southwestern East Malaysia, Keeney said. Sumatra and East Malaysia are key oil-palm regions.
A drier pattern should stay over Malaysia and Indonesia after tropical storms Matmo and Ramassun pulled moisture to the north, Streit said. One more significant storm is expected in the next week to head toward China. After that, the normal moisture feed to Southeast Asia will probably resume, he said.
El Niños, caused by periodic warming of the tropical Pacific, occur every two to seven years and are associated with warmer-than-average years. The last El Niño was from 2009 to 2010, and the Pacific has either been in its cooler state, called La Niña, or neutral since then.