The El Niño climate phenomenon is already beginning to impact agricultural production in some countries in the Asia-Pacific region, leading to concerns around water and food price inflation, according to ANZ Economist Krystal Tan.
Speaking on the new 5 in 5 with ANZ daily podcast after the release of the ANZ Research report El Niño - the risk of running dry, Tan said Thailand and the Philippines were currently facing the impact of the weather pattern.
The World Meteorological Organisation officially declared El Niño in the region in July, the first time it has been seen in seven years. The pattern is generally expected to lift global temperatures.
Tan said Thailand was “particularly vulnerable” to El Niño when it comes to agricultural production.
“[Thailand's] year-to-date precipitation has been well below historical ranges,” she said. “As a result, water levels in some of its dams are quite low.”
Officials in Thailand have already begun encouraging farmers to rethink their rice-cropping strategies, Tan said. Rice is a water-intensive crop.
“On top of this, [there are] expectations of drier than usual rainy season,” she said. “And this is causing concerns about water supply.”
Elsewhere, the Philippines faces import and inflation issues when it comes to rice, Tan said.
“As things stand, we have seen a pretty sharp rise in the prices of rice, which is the staple in the region's diet,” she said.
“And the Philippines has a challenging combination of both a high dependence on imported supplies for rice, and rice making up a very large share of inflation basket, at 9 per cent.”
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Tan also spoke about the impact of El Niño on palm oil production, and the policy levers impacted countries can use to address the phenomenon. Listen to 5 in 5 with ANZ to find out more.
