La Niña may hit the agricultural sector during the latter half of 2021

Market & Price Trends

Published Jul 14, 2021

The world has experienced moderate and strong La Niña since September 2020 and is currently experiencing neutral climate conditions. On July 8th, climate researchers of (National Oceanic and Atmospheric Administration) NOAA’s Climate Prediction Center issued a La Niña watch as there is a high possibility it will be back in the second semester of 2021 as well. The climate prediction model forecasts the return of La Niña with a 51% possibility during August - October. , and with a 66% chance from November to January. According to the model, La Nina occurs every two or seven years and can last from six to 24 months, so two consecutive years of La Niña is not uncommon. The watch shows a warning for the countries that will possibly be affected by the climate changes that will affect their economy (with a smaller agricultural output) and extreme weather.

Source: FAO

La Niña phenomenon is a part of the El Nino/ Southern Oscillation (ENSO) cycle, causing a drop in ocean temperatures in the Equatorian Pacific region inducing anomalies in continental temperatures, raining cycles, and storm patterns. The latest La Niña of 2020/21 caused severe droughts in the main grain-producing areas of Brazil, Argentina, and the US, causing a lower output than expected. Other important crops were also affected such as coffee, fruits, and vegetables around the world, due to droughts or heavy rains.

The return of La Niña will cause heavy storms during the winter season in the Pacific Northwest of the US and Canada, and droughts in the Southern US. On top of this, Peru, Chile, Ecuador, Northern Argentina, and Mid-West to South of Brazil will face a dry summer once again with possible delays in sowing for the summer crops, and a cooler summer. South American countries expected the climate to go back to its normality after several months of severe droughts, but it seems farmers will face difficulties once again.

Australia is likely to be affected by the humidity taken from the Pacific. As a result, caused many quality problems with the wheat crop, one of their main products. Although the wheat of MY 2020/21 had a high yield, the increased precipitation caused high humidity in wheat grains, lowering its grade, and in some cases restricting its usage in the baking industry.

In Africa, La Nina will cause droughts in Southern Ethiopia, South, and Central Somalia, northwestern and Western Kenya, and Northeastern Tanzania harming agricultural production of the regions. And heavy rain and floods in Northern Ethiopia, Sudan, Djibouti, Northern Somalia, Easter Chad, and Eritrea impacting human and cattle health increasing the risk of disease spread.

Overall, the return of the La Niña will continue to impact world climate and main agricultural producing regions. The real impact will felt once it starts, but countries that will be most impacted must start to prepare for another season with difficult weather conditions.