00:00I don't know if you saw that yesterday afternoon. It was sort of a red, we call it redhead on
00:04your
00:04terminal screens here, about El Nino has formed across the Pacific. That's according to the Japan
00:10Meteorological Agency and really raising the threat of droughts, floods and extreme temperatures
00:16worldwide. And this is the first El Nino event since 2023 and could be one of the strongest on
00:22record. Similar events have historically reduced yields when it comes to palm oil, coffee, cocoa,
00:28cotton and grains, including wheat and rice. So we're watching very much the impact this could have
00:32on soft commodities. You take a look at this chart, I mean, it's quite color-coded, but you take a
00:39look
00:39at, well, the chances of El Nino forming by the end of July. That was some of the early sort
00:45of
00:45estimates here. That has basically climbed to about 80 percent there, according to the U.S. Climate
00:50Prediction Center, and chances of either a strong or very strong event. That's one of the darker reds
00:55that you're seeing here since last year. So this was sort of a long time coming, but it seems like
01:00we're here, according to what we heard from Japan. Dave? Yeah, absolutely. So that actually did cross
01:06the Bloomberg terminal yesterday. That red headline, similar to that hue of Hong red that you see there
01:11with Yvonne's graphic there. So let's get more details on this and why it matters. Why is this
01:17important? Because it really is. Mary Huey, our weather reporter, is with us right now to tell us more
01:22about the significance, of course, that confirmation out of Japan and the declaration we got yesterday.
01:27Yeah. It's one of the most closely watched indicators of what weather to expect. Weather
01:33is inherently chaotic, unpredictable. But here with El Nino, we're getting a clear set of clues
01:41for what to expect in the months ahead. And so markets, governments, farmers, all sorts of industries
01:49are looking at it very, very closely just to shape their decisions and how to shift various resources
01:56in the weeks and months ahead. That's a good point. How is this going to play out in the coming
01:59months?
02:00Most of the forecasts are expecting, predicting that El Nino will continue strengthening and peak
02:06around December, January. And of course, a powerful El Nino raises the probability of more severe
02:14impacts, but it's not a one-to-one direct correlation, right? So historically, we have seen
02:19strong El Ninos lead to actually not particularly severe impacts, say, severe droughts or severe floods
02:27elsewhere. And so it does load the dice for more significant impacts. But, you know, we do have to
02:33keep an eye on how exactly it will play out. Closer to home, probably in Asia, we're looking at how
02:39the
02:39Indian monsoon will play out. Will it be significantly drier than years prior? Also on the typhoon side,
02:47usually we will see more typhoons in the West Pacific, around the Philippines, around Japan. So
02:54whether that will play out will have significant impacts for more governments.
02:57Yeah, and usually those systems tend to head to Hong Kong after they hit some of those places ahead.
03:02There's certainly been a lot more talk about how strong this one is. In fact, Super El Nino has been
03:07discussed. What's that about? Is that something we should be worried about? Or is that just a tail
03:12risk at this point? It's definitely a catchy phrase. And I think generally that is good for
03:18raising awareness. It is not an official term, right? But it does refer to how much a particular
03:24segment of the Pacific Ocean is warming. And the stronger it is, the more likely we'll see
03:29severe impacts, as I was just discussing. So yeah, with the background of climate change and globally
03:38warming temperatures, we're kind of in uncharted territory as to how exactly a strong El Nino
03:43will interact with the changing climate.
Comments