The next threat to commodity prices will be El Niño
Brazil was once a tiny exporter of maize. Within the past two decades, however, its share of global exports is expected to account for more than 30% this year. Similar success stories are found across Latin America, which is responsible for a growing share of the world’s agricultural products. This year’s harvest has been particularly bountiful, and helped make up for a shortfall of crops from Ukraine due to the war. But the next harvest may be much less abundant.
In June the world entered its “El Niño” phase, one of three stages of a weather phenomenon which brings warmer sea temperatures to the Pacific Ocean and triggers extreme weather events across the world. Past bouts of El Niño have wreaked havoc on agriculture and other industries vulnerable to changes in weather patterns. For commodity powerhouses like those in Latin America, that could spell trouble for global food supplies.
