After months of warming which led scientists to expect a strong El Nino weather event this year, the Pacific Ocean has cooled over the past month reducing the probability of a strong event occurring. Australia’s weather bureau states that ocean surface temperatures are those associated with a weak El Nino while sub-surface temperatures have cooled. El Ninos, which can occur every two to seven years, can cause heavy rains in South America and drought in the Asia Pacific region significantly affecting palm oil, cocoa, coffee, and sugar production. How tight the sugar market gets hinges upon El Nino and its effects upon India’s monsoon season according to Rabobank which forecasts a 900,000 ton sugar deficit for 2014/15 as opposed to the 1.4 million ton surplus for 2013/14. Currently India’s rainfall shortfall stands at 41%. Palm oil may also rally if an El Nino begins by mid-August according to the director at Godrej International Ltd. but may be capped if it begins any later in the season.
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