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El Nino and Export Restrictions Threaten Global Food Supplies in 2024

Global food supplies in 2024 are threatened by adverse El Nino weather patterns, export restrictions, and increased biofuel mandates. The ongoing El Nino phenomenon poses risks to the production of key crops, which could affect global food prices.

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Emmanuel Abara Benson
New Update
El Nino and Export Restrictions Threaten Global Food Supplies in 2024

Global staple food supplies are anticipated to strain further into 2024 due to a potent mix of adverse El Nino weather patterns, export restrictions, and heightened biofuel mandates.

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The El Nino phenomenon, notorious for its dry conditions, is predicted to persist through the first half of 2024. This climate disorder threatens the production of vital crops like rice, wheat, and palm oil in major agricultural regions across the globe.

Impacts on Global Agriculture

Despite increased cereal and oilseed planting worldwide, prompted by high food prices in recent years, supply concerns continue to loom. Wheat, corn, and soybean prices are expected to decline in 2023 due to easing Black Sea export bottlenecks and global recession fears. However, these commodities remain sensitive to supply shocks and the ongoing concern of food inflation.

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In Asia, dry planting conditions have spurred predictions of reduced rice yields. Indian rice exports are already under restrictions, a direct consequence of El Nino impacting production. India, acknowledged as the second-largest wheat consumer globally, may find itself importing wheat for the first time in six years. This is because state warehouse inventories have dwindled to a seven-year low.

Australian Wheat & South American Grain

Meanwhile, in Australia, the second-largest global wheat exporter, dry soils and intense heat are expected to negatively impact the upcoming crop planting. This situation could steer buyers towards sourcing wheat from other regions. South America, on the other hand, might see an improvement in grain production in 2024. However, weather irregularities in Brazil and dry conditions in Argentina cast a shadow of uncertainty.

Heightened Food Inflation Risks

Furthermore, global palm oil production is projected to decline, a scenario that supports higher cooking oil prices. Analysts caution that global grain and oilseed stock inventories are critically tight by historical standards. The potential strong El Nino during the northern hemisphere's growing season could pose further risks to food supplies. This situation underscores the gravity of the impending crisis, highlighting the need for immediate and proactive measures to buffer against potential food shortages.

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