From rice to palm oil, crop output forecasts for Asia-Pacific lower as El Nino strengthens

MUMBAI – An unusually dry August has taken a toll on cereal and oilseed crops in the Asia-Pacific

as El Nino intensified,

and forecasts for lower rainfall in September are further threatening to disrupt supplies.

Wheat output forecasts are being revised lower due to

dry weather in Australia,

the world’s second-largest exporter, meteorologists and analysts said. In India, the world’s biggest shipper of the grain, record-low monsoon rains are expected to reduce the volume of crops, including rice.

Insufficient rains in South-east Asia, meanwhile, could dent supplies of palm oil, the world’s most widely used vegetable oil, while extreme weather in top corn and soybean importer China is putting food output at risk.

“We are in full-blown El Nino weather in several parts of the world, and it is going to intensify towards the end of the year,” said Mr Chris Hyde, a meteorologist at US–based Maxar, which provides climate data analytics.

“The weather pattern in Asia will correlate with dry El Nino conditions.”

El Nino is a warming of Pacific waters that typically results in drier conditions over Asia and excessive rains in parts of North and South America.

Lack of rains in India, Australia

India’s monsoon rains, crucial for summer crops such as rice, sugarcane, soybeans and corn, are poised to be

the weakest in eight years.

“The impact of El Nino is much greater than we had anticipated,” said a senior India Meteorological Department official. “This month is going to end with a deficit of over 30 per cent, marking it as the driest August on record. El Nino will also affect September’s rainfall.”

India, which accounts for 40 per cent of global rice exports,

has curbed shipments,

lifting prices to 15-year highs.

Australia’s wheat output estimates are being revised lower by analysts for the first time in four years, as key growing areas have had insufficient rain in August.

“Wheat production is going to be three million (metric) tonnes lower than our initial estimate of 33 million tonnes,” said Mr Ole Houe, director of advisory services at agricultural brokerage Ikon Commodities. “If the dryness continues in September, we are looking at an even lower crop.”

Australia had three straight years of bumper wheat output, boosting supplies for importers such as China, Indonesia and Japan.

Tropical S-E Asia hit by dryness

Rice, palm oil, sugarcane and coffee crops have received lower-than-usual rainfall in South-east Asia, with Indonesia and Thailand the worst hit.

“Eastern parts of Indonesia and much of Thailand has had very little rain in the past 30 to 40 days,” Maxar’s Mr Hyde said.

“In these areas, precipitation has been 50 to 70 per cent of average. Most of September is going to be largely below normal rains in Thailand and Indonesia,” he said.

In the United States, corn and soybean crops have suffered in recent weeks due to dryness, although the weather is not associated with El Nino, said Mr Drew Lerner, president of World Weather.

From November to February, however, US farms will see a bigger impact from El Nino, with above-average precipitation in southern states, benefiting winter wheat, Mr Lerner said.

South American weather is expected to be crop-friendly for soybeans and corn, which will be harvested in early 2024. REUTERS