Update COVID-19 in Indonesia: 4,223,094 confirmed infections, 142,413 deaths (06 October 2021)
17 October 2021 (closed)
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Australia's Bureau of Meteorology is increasingly convinced that the world needs to prepare for a new El Niño cycle. According to the institution, the impact of this new cycle will be felt starting from July 2014 and may continue through the winter. Also the European Center for Medium range Weather Forecasting (ECMWF) and the US Climate Prediction Center stated that chances of a new El Niño cycle in 2014 are becoming higher, although it is too early to provide an indication of this year's strength of the weather phenomenon.
El Niño is a weather phenomenon which occurs once every five years on average. The phenomenon involves warm water in the Pacific Ocean that can cause droughts in some regions (possibly leading to famine), while it can cause floods due to high rainfall in other places. Once every twenty years, the impact of El Niño on the environment is extra strong. The last time the world witnessed an extra strong El Niño cycle was in 1997-1998 resulting in the deaths of around 2000 people and damages worth of tens of billions US dollars. Forecasts of the aforementioned institutions suggest that this year's El Niño may be rather strong.
The cycle is expected to cause a dry summer in North America, West Africa, Australia and Southeast Asia (including Indonesia). This will then impact on the production rates of the agricultural commodities that are cultivated in those regions and thus impact on commodity prices. Therefore, the Goldman Sachs Group recently released its view on the possible impact of the new El Niño cycle. The group believes that - as the cycle will cause relatively mild weather conditions in the Atlantic Ocean - it implies less disruptions in the oil industry in the Gulf of Mexico. It is also expected to result in a relatively mild summer in North America, which means that less gas supplies are required to fuel air-conditioners, providing opportunity for easing gas prices. Goldman Sachs sees a larger impact on agricultural commodities. Droughts in Asia, West Africa as well as Australia will curb production of various crops such as palm oil, cocoa, sugar, coffee and (albeit less heavily impacted) wheat, triggering higher prices. Corn and soy, on the other hand, will benefit from the mild summer in the USA and thus these prices may decline.
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• Commodity Update: Anticipating Higher Prices of Coffee, Palm Oil and Cacao
• Concern about El Niño and Ukraine Tensions Impact on Commodities
• Overview of Palm Oil in Indonesia
• Analysis of Coffee in Indonesia
• What are the most Important Commodities of Indonesia?
• Natural Disasters in Indonesia