El Niño’s storm clouds gather over global food prices (Financial Times)
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El Niño’s storm clouds gather over global food prices (Financial Times, 29 August 2023)
30 August 2023
Impact of El Niño on Global Food Prices - Summarising an article published on the Financial Times on August 29, 2023
What's Happening? - The upcoming El Niño season will likely exacerbate rising global food prices, disproportionately impacting inflation rates in emerging markets.
Contributing factors - El Niño is expected to compound the effect of India's recent ban on non-basmati rice exports and Russia’s withdrawal from the Black Sea grain deal which have been pushing prices higher.
Economic impact - Inflation could rise significantly in emerging markets, potentially forcing central banks to keep interest rates high.
Market impact - Analysts warn that investors have not yet priced in the upcoming risks related to extreme weather events.
Beyond food prices - El Niño could also affect global prices for commodities like rubber, timber, and zinc, and consequently developed markets.
The Land Group