El Niño is a global climatic phenomenon of extreme droughts and floods that happens once every several years.
Researchers say that a new phase of El Niño has already begun and will last until 2024. This will negatively affect the global economy, primarily due to the rise in food and energy prices.
According to research done by Bloomberg Economics, previous El Niño periods caused global oil prices to rise by 3.5%, while the prices of other goods rose by nearly 4%.
The impact of El Niño on food inflation
Since cataclysms reduce crop yield, an increase in global prices for agricultural products is also inevitable. And this will benefit the Russian economy.
In the 2022–2023 marketing year, the terrorist country exported a record 45.5 million tons of grain. In 2023–2024, this amount is predicted by the United States Department of Agriculture to reach 47.5 million tons. A part of this grain was stolen by Russia from the temporarily occupied Ukrainian territories.
Higher oil prices will also mean additional contributions to the aggressor’s budget. The price of Brent crude oil is predicted to rise from $85 to $91 per barrel by the end of the year.
Meanwhile, Ukraine won’t gain much from higher grain prices. According to the same estimations, grain production in Ukraine has almost halved over the past two years, and in the 2023–2024 marketing year, corn and wheat exports will fall by another 6 million and 10 million tons, respectively, compared to 2022–2023.
The lack of cheap logistics options for exports also means that the net profit from grain sales in Ukraine is significantly lower than in other countries.
For reference:
- El Niño is a drastic rise (by 5–9 °C) of the sea surface temperatures in the central and eastern tropical Pacific Ocean, spanning approximately 10 million square kilometers. It is a global-scale phenomenon that impacts, directly or indirectly, the weather on a significant part of the Earth. El Niño is believed to affect the weather in Ukraine as well.
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