El Niño has minimal effects on sector in Europe
The World Meteorological Organization (WMO) is one of the international organizations closely monitoring the developments of El Niño. The models on which the WMO bases its expectations, predict a bigger chance of an El Niño for the second half of this year. While there is always an element of uncertainty, it’s gradually becoming clearer that an El Niño is coming.
Foregone conclusions
"It is expected that the first signs of higher temperatures caused by El Niño will be visible in July and August," says Siemen van Berkum. "Consequences for cultivation and production will be noticeable for about a year, let’s say one growing season. Especially in countries around the Pacific, consequences will be observable. Australia, Philippines and Thailand might have to contend with drought. On the other side of the ocean there will be more rain.”
The force of an El Niño, foregone conclusions notwithstanding, is notoriously difficult to predict. Siemen van Berkum believes most reports are premature. "It is highly uncertain whether the effects and the strength of El Niño will be just as big as in 1997. The best thing to do is prepare yourself for some inconveniences and keep in mind that the consequences could be there. To panic, however, is premature."
Serious threat
El Niño though, should not be underestimated. In the markets for corn and soybean, Van Berkum can see prices rising already. But he adds immediately that there is no direct correlation between the price increases and El Niño. Other events, such as the unstable situation in Ukraine, is also affecting prices.
In the 1980s, damage to the agribusiness in South America amounted to hundreds of millions of dollars. Ecuador suffered a financial loss of 233.8 million dollars. For Peru, it was $ 649 million dollars and for Bolivia 716 million. The Brazilian states of Paraná and Santa Catarina had to contend with extreme rainfall and reduced harvests. The bean crop was 49.8 percent lower. Potatoes and apples suffered decreasing volumes of 27.4 and 22.5 percent respectively.
Little impact on the Netherlands
Referring to the FAO data, Siemen van Berkum expects the impact on food supply is relatively minimal. "Stocks can be supplemented. Lots of food stocks in Asia are higher than in recent years, especially after the good harvest last year.”
In the Netherlands, the consequences will be visible in higher prices for cattle feed. Siemen van Berkum: "I don’t think the Dutch sector will be much affected. The alternatives on the market are large. If there are countries which are affected, the Netherlands can reduce import from those countries and look for alternatives, for example, in Europe and the United States.”
