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Thu, Mar 07, 2002 - Page 21 News List

Farmers, insurers worldwide brace for El Nino's return

BLOOMBERG , SINGAPORE

El Nino, the cyclical weather pattern that caused thousands of deaths and US$96 billion of crop and property losses in 1997, may return this year.

El Nino is "still on track," said Vernon Kousky, a climate specialist at the National Oceanic & Atmospherics Administration, which is due to issue its latest El Nino forecast tomorrow.

Farmers, governments and insurers worry about a repeat of last time, when Peru's fish exports and Fiji's sugarcane harvest fell by half, banana prices tumbled and palm oil prices surged.

Singapore and Kuala Lumpur were engulfed in smoke as a delay in seasonal rains left firefighters unable to control Indonesian forest fires.

"Nothing has been done to change the behavior of people involved in burning and deforestation," said David Glover, director of the Economy & Environment Program for Southeast Asia in Singapore. "The damage can be expected to be as bad as five years ago."

The evidence: the southeastern Pacific has warmed by a few degrees Celsius, scientists say, heralding a global climate change that brings atypical drought to Southeast Asia and rainstorms to California and Peru every five to 10 years.

The phenomenon affects crops like coffee, tea, sugar, grains and oilseeds from Australia to India to Mexico. It boosts harvests for some and slashes yields for others: the 1991-1992 El Nino cut South Africa's corn crop 65 percent while boosting wheat.

Some governments are already making forecasts on the assumption El Nino is returning. Malaysia, which produces four-fifths of the world's palm oil along with Indonesia, says output may drop 15 percent this year. A 10 percent decline in 1998 helped prices double to a record 2,600 ringgit a tonne.

Economies may suffer in Southeast Asia and South America, the worst hit in 1998, as flooding or forest fires crimp revenue from farm exports.

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