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Hansen: A commodity crisis if El Niño hits
Forecasts predicting the return of El Nino weather patterns are raising concerns about the potential effects on global commodity markets this year. Almost all major agricultural commodities would be affected by a severe El Nino, as they were in 1997. Scientists calculate a 75 percent risk of another El Nino causing extreme weather in 2014.
The crops most at risk from El Nino are coffee and sugar in South America which would be badly affected by increased rainfall. In Asia rice, coffee and palm oil harvests would be disrupted.
Wetter weather could in fact be welcomed in California where drought conditions have damaged agriculture for a decade.
Saxo Bank’s Head of Commodity Strategy Ole Hansen assesses the El Nino risk and brings us up to date with the surge in industrial metal prices this week.
02:18 minutes
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