El Niño strikes: Brace yourself for a looming food crisis

The probability of El Nino events occurring in Aug'12 – Mar'13 has increased further.

According to Nomura Research, the past few weeks have seen a worsening of drought conditions in the
US, with 37% of soy and 51% of corn judged to be in very poor or poor conditions (vs 14% and 17% in 2011, respectively, USDA August report).

Meanwhile, according to International Research institute for Climate, the  probability of El Nino events occurring in Aug'12 – Mar'13 has increased  further. This would bring drier weather and affect 2H12F palm yields /production in Malaysia/ Indonesia, which already saw a 9% y-y drop in production in 1H12 (due to El Nino in 2010), said Nomura.

Here's more from Nomura:

Since time immemorial, the destiny of humans has been inseparably intertwined with  agriculture that is heavily dependent on weather. Now, the spotlight is back on weather  as the most severe US drought in 50 years has already caused heavy damage on wide swathes of corn, soybeans, wheat, cotton and numerous other crops.
Weather is how atmosphere behaves on a day-to-day basis, including temperature, rain  and wind. Climate looks at the weather over a long period at a particular region and is  characteristically marked as a specific climatic zone.
Climate and weather are results of complex interactions of Sun, Moon, Ocean and Earth’s atmosphere that result in different temperature, wind patterns and precipitation.  El Nino and La Nina are two of the most commonly observed weather patterns that  deviate from normal weather conditions across the major parts of the world.
The reigning drought (worst in the last 50 years) in the US, weak monsoon and wetter- than-normal conditions in Europe have firmly put the spotlight back on vicissitudes of weather and its impact on agriculture trades and commodity prices.
Weather impact on agriculture production can trigger a food  crisis - 2008 a case in point In 2007-2008, prices of most staples rose sharply which led to food riots in developing  countries such as Egypt, Haiti, Burkina Faso, Bangladesh and many other nations. According to a World Bank study in 2008, the food crisis of 2008 was triggered by a confluence of factors such a extreme weather and subsequent declines in crop yields, an
increased share of cereals diverted to biofuels, high crude oil prices impacting agri  production costs and knee-jerk policy reactions.