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El Niño blamed for spike in global food prices

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Global food prices spiked in October, according to the United Nation’s Food and Agriculture Organization. Prices jumped nearly 4 percent from September.

The climate cycle known as El Niño appears to have played a role.

“When you look at all the different factors, all the different drivers that affect prices, weather always tops them as being one of the most important,” said Abdolreza Abbassian, senior economist at the UN agency.

Abbassian said the organization’s index, which tracks prices of cereals, vegetable oils, meat, dairy and sugar, had been dropping on a monthly basis for about a year.

But in October, prices shot up, especially for sugar. Abbassian said Brazil, the world’s top sugar producer, had a lot of rain at harvest time, likely because of El Niño effects. That delayed production. 

El Niño brought about the opposite problem — excessive dryness — in Indonesia, affecting production of palm oil there.

International food prices in October were still down 16 percent year-over-year. But Abbassian said the weather events made commodities traders skittish about supplies, and monthly prices spiked. 

“Because weather has not been very favorable, dry in places where it should not be dry, too wet in places where it shouldn’t have been wet, basically you have conditions where people see across the board — be it from sugar or cereal or palm — that the weather is going to drive production much lower in 2016 as compared to 2015,” he said.

Abbassian cautioned against reading these weather events as proof of climate change, which he said can strengthen or weaken El Niño patterns. He said El Niños happen with or without global warming.

In the short term, strategic reserves of commodities can act as a cushion when such weather shocks occur, said Shenggen Fan, director general of the International Food Policy Research Institute. 

Long-term, Fan said, such shocks underscore the need for more resilient agriculture systems. 

“We can invest in irrigation,” he said. “So that even when there is a drought, we can still have a crop.”

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