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LATEST NEWS UPDATES | El Nino: How the climate pattern may prolong food inflation 

El Nino: How the climate pattern may prolong food inflation 

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published Published on Jun 20, 2023   modified Modified on Jun 20, 2023

Deutsche Welle/The Telegraph

El Nino, a natural climate phenomenon that alters global weather patterns, has officially returned after four years, threatening to exacerbate already elevated food inflation.

Growing warnings about El Nino have already helped coffee, sugar and cocoa prices to rise sharply in recent weeks, Germany's biggest private lender, Deutsche Bank, said in a research note last week. Other food commodities are expected to follow as harvests get impacted by severe weather events.

"[Rising prices] could have a particularly negative effect on emerging markets, where it's regularly the case that food makes up at least a third of consumer expenditure. Their geographic position also leaves them more exposed to climatic changes such as flooding, which an El Nino event makes more likely," Deutsche Bank analysts wrote.

In India, where agriculture is a cornerstone of the economy and the annual monsoon is crucial to food output, policymakers have spoken of the need to stay vigilant.

"Close and continued vigil ... is absolutely necessary, especially as the monsoon outlook and the impact of El Nino remain uncertain," Reserve Bank of India chief Shaktikanta Das said recently.

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Deutsche Welle/The Telegraph, 17 June, 2023, https://www.telegraphindia.com/world/el-nino-how-the-climate-pattern-may-prolong-food-inflation/cid/1945752


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