Potential El Nino may hit shipping patterns, raise freight costs
Weather changes could affect output of key foods such as rice, wheat, sugar
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[LONDON] A potential El Nino weather phenomenon, which could wreak havoc on global crops, is set to disrupt shipping patterns and raise freight costs, leaving suppliers and importers to cover their food needs from longer-haul destinations.
El Nino, a warming of sea-surface temperatures in the Pacific, can trigger floods and drought in different regions, hitting production of key foods such as rice, wheat and sugar. Weather forecasters are increasingly predicting it will return in 2014 for the first time in five years.
During previous El Nino patterns, the main sea freight index at London's Baltic Exchange has risen significantly. In February 2009 when El Nino appeared, the BDI was at 1,099 and it reached 2,998 in March 2010 before the phenomenon abated. From March 2006 to February 2007, it went from 2,708 to 4,765.
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