[Agrimoney, 17 May 2015.] El Nino is threatening eastern Australia’s production of cotton, sugar and grains – and Vietnam’s coffee output.

Below is an edited extract from Agrimoney’s article, Olam warns of El Nino threat to Vietnam coffee output which was published on 17 May 2015.

Olam International cautioned over a dent from the nascent El Nino to coffee production in Vietnam, where a veteran analyst cautioned over a “100-year drought in the making”.

A Shekhar, the Olam International finance director, said that the Singapore-based agricultural trader was “watching like a hawk” the development of the El Nino weather pattern, which official Australian and Japanese meteorologists said last week had returned for the first time in five years.

El Ninos have a history of causing weather anomalies, and yield effects – both negative and positive – in a range of countries.

The El Nino threatened “broadly two kinds of impacts” – the first, dryness in eastern Australia, a major cotton-, sugar- and grain-growing region, and the second in the South East Asian coffee belt.

‘Baking in heat’

“In parts of Indonesia and Vietnam, for example, where we do coffee, we would expect decline in production and lower rainfall,” Mr Shekhar said.

The comments come as much of Vietnam, the top robusta coffee-producing country, is already grappling with dryness, making crucial a generous rainy season, which should start imminently in the key Central Highlands coffee regions, and last to the late-year harvest period.

Judith Ganes-Chase, the veteran soft commodities analyst, said that “Vietnam has been baking in heat with a [once in a] 100-year drought in the making and vegetative growth showing extreme stress over the coffee belt”…

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