Food prices are starting to rise with expectations that the El Niño weather event will arrive this year.
The World Bank says there’s been a recent rise in grain prices despite good supply.
“The adverse weather conditions and the associated uptick in food prices at the start of the year have been linked to the El Niño phenomenon, which can inflict heavy damage on crops,” the World Bank says in its latest Global Economic Prospects report.
Australia’s Bureau of Meteorology and the US National Oceanic and Atmospheric Administration gives a 65%–70% likelihood this could be an El Niño year.
Global yields of rice, which grow at 1.7% per a year in normal years, grew only 0.7% during the five strong El Niño years.
Growth in wheat yields experienced similar declines, from 2.1% to 1.4%.
From a regional perspective, El Niño tends to inflict considerable damage to mainly rice and wheat crops in South America, mainly rice in South East Asia and wheat in Australia.
Wheat production in Australia grew at 10.3% during the past five decades but experienced a 27% decline during the strong El Niño years.
El Nino conditions generally result in below average winter/spring rainfall over southern and inland eastern Australia, while southern Australia typically experiences warmer days.
The Bureau of Meteorology says the tropical Pacific Ocean remains on track for El Nino in 2014 with just over half of the climate models surveyed by the Bureau suggesting El Nino will become established by August.
An El Nino ALERT remains in place, indicating at least a 70% chance of an El Nino this year.
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