El Niño’s storm clouds gather over global food prices (Financial Times)

El Niño’s storm clouds gather over global food prices (Financial Times, 29 August 2023)

30 August 2023

Impact of El Niño on Global Food Prices - Summarising an article published on the Financial Times on August 29, 2023

What's Happening? - The upcoming El Niño season will likely exacerbate rising global food prices, disproportionately impacting inflation rates in emerging markets.

Contributing factors - El Niño is expected to compound the effect of India's recent ban on non-basmati rice exports and Russia’s withdrawal from the Black Sea grain deal which have been  pushing prices higher.

Economic impact - Inflation could rise significantly in emerging markets, potentially forcing central banks to keep interest rates high.

Market impact - Analysts warn that investors have not yet priced in the upcoming risks related to extreme weather events.

Beyond food prices - El Niño could also affect global prices for commodities like rubber, timber, and zinc, and consequently developed markets.

TLG Management Partners