How El Ni帽o may impact the world's wheat and global food supply
The World Meteorological Organization has declared the onset of the first El Ni帽o event in seven years. It estimates 90 percent probability the climatic phenomenon, involving an unusual warming of the Pacific Ocean, will develop through 2023, and be聽.
El Ni帽o events bring hotter, drier weather to places such as Brazil,聽聽and Indonesia, increasing the risk of wildfires and drought. Elsewhere, such as Peru and Ecuador, it increases rain, leading to floods.
The effects are sometimes described as a preview of 鈥渢he new normal鈥澛�. Of particular concern is the effect on agricultural production, and thereby the price of food 鈥� particularly 鈥渂readbasket鈥� staples such as wheat, maize and rice.
El Ni帽o鈥檚 global impacts are complex and multifaceted. It can potentially impact the lives of the majority of the world鈥檚 population. This is especially true for poor and rural households, whose fates are intrinsically linked with climate and farming.
"Despite the general inflationary pattern, there have rarely been big swings in El Ni帽o years."
The global supply and prices of most food聽. The evidence from the ten El Ni帽o events in the聽聽suggests relatively modest, and to some extent ambiguous, global price impacts. While reducing crop yield on average, these events have not resulted in a 鈥減erfect storm鈥� of the scale to induce global 鈥溾��.
But local effects could be severe. Even a 鈥渕oderate鈥� El Ni帽o may significantly affect crops grown in geographically concentrated regions 鈥� for example palm oil, which primarily comes from Indonesia and Malaysia.
In some places El Ni帽o-induced food availability and affordability issues may well lead to serious social consequences, such as conflict and聽.
El Ni帽o and global food prices
Despite the general inflationary pattern, there have rarely been big swings in El Ni帽o years. Indeed, it shows prices decreasing during the two strongest El Ni帽o episodes of the聽.
El Ni帽o and global food prices
Changes in the Food Price Index, published by the UN Food and Agriculture Organization. Grey bars indicate El Ni帽o years.
El Ni帽o years are shown by nine-month periods centred on December (August to April). These are approximations and should be treated as indicative.聽聽
Other human-caused factors were at play 鈥� notably the Asian Financial Crisis in 1997, and the Global Financial Crisis in 2007-2008. In 2015, prices decreased due to stronger (than expected) supply and weaker demand, when the El Ni帽o event did not turn out to be as bad as feared.
This all suggests that El Ni帽o does not usually play the lead role in global commodity price movements.
Impacts on wheat supply
Why? Because El Ni帽o does induce crop failures, but for food grown around the world the losses tend to be offset by positive changes in production across other key producing regions.
For example, it can bring favourable weather to the conflict-ridden and famine-prone Horn of Africa (Djibouti, Ethiopia, Eritrea and Somalia).
A good example is wheat.
The following chart shows how El Nino has affected Australian wheat production since 1980. In six out of nine El Ni帽o events of at least moderate strength, production has dropped significantly 鈥� in four cases, at least 30 percent below the 鈥渢rend line鈥� (representing the long-term average).
El Ni帽o and Australian wheat production
Wheat production (in metric tonnes). Grey bars indicate El Ni帽o years.
El Ni帽o years are shown by nine-month periods centred on December (August to April). These are approximations and should be treated as indicative.
Australia is one of the world鈥檚聽, accounting for about 13 percent of global exports. So its production does affect global wheat prices. But in terms of total wheat grown it鈥檚 less significant 鈥� about聽. And El Ni帽o-induced crop failures tend to be offset by production in other key wheat-producing regions.
The next graph compares changes in Australia鈥檚 wheat production with other significant wheat exporters in El Ni帽o years. Dips in Australia鈥檚 production tend to be offset by changes elsewhere.
El Ni帽o effects on five major wheat exporters
Dots show percentage change in wheat production by El Ni帽o year.
"Dips in Australia鈥檚 production tend tend to be offset by changes elsewhere."
In 1994, for example, Australian wheat production dropped nearly 50 percent but barely changed elsewhere. In 1982, when Australian production dropped 30 percent, Argentina鈥檚 production was 50 percent higher. Such balancing patterns tends to be present across most El Ni帽o years.
But some will bear the cost
That said, there will be at least some negative effects. Even if crop failures in one region are fully offset by rich harvests in others, some people are going to bear the costs of El Ni帽o鈥檚 direct impact.
Australian farmers, for example, will be worse off if local wheat yields drop while global prices remain relatively stable.
Moreover, because most countries are connected via trade, El Ni帽o will have wider聽. It could still lead to deeper societal issues in some region, such as famine and聽.
These effects may also be nuanced. For example, poor harvests in Africa may mitigate seasonal violence linked with the appropriation of聽. But considering other vulnerabilities around the world, the odds are that even a moderate El Ni帽o will make already dire socio-economic conditions in some countries worse.
Most of the usual warnings about the caveats of climate change apply here. The difference, of course, is that all this is happening now.
This article was originally published in The Conversation as: It was written by Associate Professor David Ubilava from the Faculty of Arts and Social Sciences, who studies Agricultural Economics.
Graph Souce: Associate Professor David Ubilava, based on data from the United States Foreign Agricultural Service.聽