It looks like there is going to be an “El Nino” this year. This is a meteorological
event which takes place in the Pacific Ocean but has global reach.
An El Nino makes
countries like India, Indonesia and Australia drier. This, in turn, increases chances of
wildfires and lower crop production.
For example, India recorded the lowest amount of rain in June in five years. This is crucial to that country's food production. El Nino is expected to lower India's rainfall for the year by 7%. We will see how that impacts India's gold demand (Indian farmers buy a lot of gold).
El Nino also causes heavier rainfall in the eastern
Pacific and South American nations. Finally, it tends to make the U.S.
Southwest drier, and that region is already having a drought.
So, that will affect U.S. food prices and potentially our
economy down the road. Keep an eye
on that.
No comments:
Post a Comment