The main meteorological agencies have officially announced the appearance of El Niño. ANZ Bank strategists believe El Niño-related shocks will be short-lived and contained in the Asia-Pacific.
El Niño is a regional phenomenon
Although production losses due to El Niño will put upward pressure on food commodity prices in Asia and Australia, we believe the impact on food inflation will be regional and short-lived.
The upward risks to grain prices come from the rise in input prices (fertilizers, oil) and the war between Russia and Ukraine. Rising energy prices could impact food raw materials by increasing the cost of production and boosting demand from the biofuels sector.
Disruption to grain exports has so far been limited, despite the scrapping of the Black Sea Grains Initiative, but an escalation of that conflict remains a risk. The other risk is that El Niño will be stronger and/or last longer than expected.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
