El Nino over in June, La Nina to follow?–FAO
The Food and Agriculture Organization said the El Nino may be over in June, having peaked in late 2015 but warned of a possible La Nina.
“The ongoing El Nino peaked in late 2015 and is now in decline, with forecast models indicating that the transition to neutral conditions will be complete by about June,” the FAO’s March 2016 Market Monitor said.
The El Nino weather phenomenon is a severe dry spell that happens every two to five years.
“Drought is expected to continue in Southeast Asia and across northern South America, including northeast Brazil. In Southern Africa, drought impacts on crop production are widespread and severe,” it added.
The FAO said the neutral conditions may continue until the last quarter of 2016 but warned that it could also transition into La Nina, which is characterized by heavy rains and tropical cyclones.
“Odds of reverting to El Niño are low. A review of past El Niño events and model projections for October-December 2016 puts the probabilities at approximately 50 percent for La Niña, 40 percent for neutral, and 10 percent for El Niño,” the FAO said.
According to the FAO’s March 2016 Market Monitor, the conditions for growing rice in Asia are mixed, with Thailand experiencing severe dry spells because of the El Nino phenomenon although it is generally favorable to grow rice elsewhere in Asia, specifically in India, China and Vietnam.
Conditions for growing corn, meanwhile, are generally favorable in the southern hemisphere, except for South Africa which is experiencing severe drought that is attributed to El Nino. The lack of rain is also a concern in Brazil but conditions for growing corn in India and Mexico are generally favorable.
The conditions for wheat are also mixed. The FAO’s Market Monitor said conditions are still favorable at this early stage of the season for wheat although planting has not yet started. In Ukraine, however, there are concerns on poor conditions that has led to a reduction in the area planted to wheat.
The FAO said prices of wheat, corn, soybeans, and rice were mostly unchanged month on month in the futures market, characterizing trade in February as lackluster despite the slight easing of the US dollar against some currencies.
Year on year, however, the price of rice in the futures market was higher by 3.4 percent while prices of wheat, corn and soybeans fell. (By: Eileen A. Mencias)