The impact of El Niño on global food production – 07/30/2023 – Environment

The World Meteorological Organization (WMO) has declared the onset of the first El Niño event in seven years. The WMO estimates at 90% the probability of occurrence, throughout 2023, of the climate phenomenon that involves the unusual heating of the Pacific Ocean, with moderate power.

The El Niño phenomenon brings warmer, drier weather to places like Brazil, Australia and Indonesia, increasing the risk of wildfires and droughts. In other countries, such as Peru and Ecuador, it increases rainfall, causing floods.

The effects are sometimes described as a preview of the “new normal” in the face of climate change generated by human activity. And its consequences on agricultural production —and therefore on the price of food, in particular basic grains such as wheat, corn and rice— are particularly worrying.

The global impacts of El Niño are complex and diverse. Potentially, it can influence the lives of the majority of the world’s population, especially poor and rural families, whose fate is inextricably linked to climate and agriculture.

The global supply and prices of most foods are unlikely to fluctuate so much. Evidence from ten El Niño events over the last five decades indicates relatively modest and, to some extent, ambiguous impacts on global prices.

These events, while reducing average agricultural production, did not result in the “perfect storm” on the scale that would induce “shocks to staple grain production.”

But local effects can be serious. Even a “moderate” El Niño can significantly affect products restricted to specific geographic areas, such as palm oil, which comes mainly from Indonesia and Malaysia.

In some regions, the availability and accessibility of food induced by the El Niño phenomenon can have serious social consequences, such as conflicts and famine.

Impact on global food prices

The following graph displays the correlation between El Niño events and global food prices as measured using the United Nations Food Price Index.

The index tracks monthly changes in international prices for a basket of staple foods.

It demonstrates a general inflationary pattern for food, but there are rarely large swings in El Niño years. On the contrary, the index shows price reductions in the two strongest episodes of El Niño in the last three decades.

Other human-caused factors influenced prices, most notably the Asian financial crisis in 1997 and the global financial crisis of 2007-2008. And in 2015, food prices fell due to reduced demand and higher-than-expected supply, as the occurrence of El Niño turned out not to be as strong as feared.

All of this suggests that El Niño does not normally play a major role in fluctuations in global commodity prices. commodities.

Impacts on wheat supply

Why does it happen? Because El Niño does indeed cause reduced agricultural production, but in the case of foods that are grown around the world, these losses are often offset by increased production in other important regions.

The phenomenon may bring, for example, favorable climatic conditions to the Horn of Africa (Djibouti, Ethiopia, Eritrea and Somalia), a region plagued by conflicts and susceptible to famine.

Wheat is a good example of a product. El Niño has affected wheat production in Australia since the 1980s.

Out of nine El Niño events of at least moderate potency, Australian wheat production fell significantly in six of them — and in four of those cases at least 30% below average.

Australia is one of the top three exporters of wheat in the world. It represents about 13% of world exports. Therefore, its production really affects the world prices of the product.

But in terms of total wheat grown, Australia is less significant — it accounts for around 3.5% of world production. And the reduction in Australian production caused by the El Niño phenomenon tends to be offset by production in other major wheat producing regions.

The following graph compares changes in Australian wheat production with other major wheat exporters, in El Niño years. Falls in Australian production tend to be offset by changes in other parts of the world.

In 1994, for example, Australian wheat production fell by around 50%, but it saw little change in other parts of the world. In 1982, when Australian production fell by 30%, Argentina’s crop was 50% higher.

These equilibrium patterns tend to exist in most years when the El Niño phenomenon occurs.

But someone will foot the bill

That said, it needs to be pointed out that there will still be some negative effects.

Even if falling production in one region is fully offset by higher yields in others, some people will pay the costs of El Niño’s direct impacts.

Australian farmers, for example, will suffer most if local wheat production falls and global prices remain relatively stable.

Furthermore, as trade between most countries is connected, El Niño will have broader economic impacts. And it can also create deeper social issues in some regions, such as famine and agricultural conflicts.

These effects can also be more subtle. Crop reduction in Africa, for example, can reduce seasonal violence related to the appropriation of excess agricultural production.

But given other vulnerabilities around the world, the likelihood is that even a moderate El Niño will further exacerbate certain socioeconomic conditions that are already disastrous in some countries.

Most of the common warnings and alarms about climate change also apply here. The difference, of course, is that all of this is happening right now.

*David Ubilava is Professor of Economics at the University of Sydney, Australia.

This article originally appeared on The Conversation academic news site and is republished under a Creative Commons license. Read the original English version here.