Emerging Markets: El Niño Shock in Asia Drives Global Agricultural and Metal Prices Upwards
Asia's emerging countries are suffering the most from the climate phenomenon. Food prices are rising. But the pressure on costs in global supply chains is also likely to increase.
Indians farmers have not experienced such little rain during the monsoon season in decades. June to mid-September saw rainfall amounts 15 percent below the long-term average. Should this continue until the end of the month, it would be the driest rainy period in nearly two decades with serious consequences for crops. Planting of rice, sugar cane and maize has already begun late.
Prices have risen significantly: food inflation jumped to nearly six percent in August. According to India's weather agency, El Niño is the main cause of the low rainfall affecting a large part of the population. Over 40 percent of the workforce in the world's most populous nation works in agriculture and must face lower incomes during crop failures.
Higher inflation is not the only Asian nation hard hit by El Niño. The Asian Development Bank (ADB) warned on Wednesday in its published economic outlook that Asian emerging economies will likely suffer the most among the global comparison. ADB Chief Economist Albert Park predicts, "El Niño is expected to be very strong, further slowing growth and pushing prices up."
Written by urgent.news from Handelsblatt's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
