The El Nino phenomenon threatens to increase prices in global food markets

The El Nino phenomenon threatens to increase prices in global food markets

The Financial Times writes that food prices are expected to increase in the coming months as a result of "El Niño". The phenomenon is predicted to significantly increase the temperature in the producing areas of Asia and Central America in the coming period, but also cause heavy rainfall in areas of South America.

How is global warming affecting food prices?

According to past reports from the European Central Bank, an increase in temperature by one degree Celsius leads to an increase in global food prices by more than 6%, one year after the phenomenon began.

El Niño's threat to households around the world adds to a range of risks that are already putting severe pressure on food costs.

The two main factors behind global food insecurity, apart from El Niño, are the breakdown of an agreement to export Ukrainian wheat through the Black Sea in July, with Russia then bombing warehouses, ports and ferries in the Black Sea and the Danube, and the decision almost India's simultaneous move to ban or limit rice exports in order to prevent price increases in the domestic market.

As Russia, Ukraine and India have historically been three of the world's largest exporters of cereals, corn, oil and rice, these developments have raised serious concerns throughout the production and transport chain.

Market veterans also point out that there is a risk of container moves, meaning a shortage of even one commodity like wheat could cause a domino rise in rice prices, given that it is the easiest option for many consumers. especially in developing countries.

Additional concern is caused by the possibility of curtailment of Indian sugar exports as a result of water shortages observed in production areas in recent months.

The UN's World Food Index, which has been in near-constant decline since last summer, rose by 1.5 points between June and July.