El Niño is Officially Here!

The world has officially entered an El Niño phase, according to the US science agency NOAA.

To keep a pulse on the impact of El Nino on global sugar production, the CSC Sugar Trading team recently invited a meteorologist from World Weather Inc. to share their predictions on how El Nino will affect weather in key growing areas.

What is El Nino?

El Niño is a climate pattern that describes the unusual warming of surface waters in the eastern Pacific Ocean. By definition, the ocean temperatures need to be at least 0.5 degrees Celsius warmer than usual between the International Dateline and the coast of South America for a period of three to five months.

El Niño phases are known to last close to four years. Normally higher temperatures prevail, and weather extremes are not uncommon.

Impact on Major Sugar Growing Areas

North America

El Nino’s influence on North America during the developmental months is usually not very significant. Other weather patterns are normally prevailing. An 18-year cycle pattern is prevailing at the moment with some influence similar to other years in which we have moved from a multi-year La Nina event to El Nino. Beet conditions are mostly good in Wyoming, Nebraska, Colorado and Michigan. Idaho production areas have turned hotter and drier recently, though irrigation should be helping. The Red River Valley is another area that has been trending drier recently and will be seeing hotter and drier weather for a while. Louisiana sugarcane has already been impacted this year by freeze conditions and then a wet spring and now dryness is becoming a concern. Florida cane is looking good.

Mexico

The delay in monsoonal rain in Mexico has induced drought conditions. Rain frequency and amounts should be improving over the next couple of weeks. The moisture will be imperative for better sugarcane development. Stress in the past 30 days in some SW areas has likely stunted early season growth, but there is still time for improvement.

Brazil

Brazil harvest weather has been good thus far. There will be a good chance for the start of 2023-24 seasonal rains to begin earlier than usual. For that reason, harvesting will need to be expedited in the next few weeks to protect sucrose levels and to ensure that wetter weather later this calendar quarter will not harm the overall bottom line. Most of the crop is expected to yield well. The early and aggressive spring rainfall this year should lead to aggressive new early-season growth.

Northeastern Brazil, Central America and southern parts of Mexico may experience less than usual rainfall during the September through November period. There is some potential for the dryness in northeastern Brazil to continue in the December through February period, despite wetter biases in the past. U.S. weather will be drier and warmer than usual in the late autumn and winter in sugar beet areas while wetter and cooler biased in sugarcane areas.

Australia and Southeast Asia

Sugarcane production comes mostly from Queensland Pacific coastal areas and northeastern New South Wales. Rainfall has been lighter than usual for an extended period of time already in the region, but rainfall early in the cane development season was good. Harvesting occurs from now through December and the potential is for more dry weather in eastern parts of the nation that will not only cut into this year’s tonnage, but it could also have a similar impact on 2024 crop development. Sucrose levels will be up because of the dryness.

El Nino’s most dominating influence on crops is usually from India through Southeast Asia to northern and eastern Australia. Below normal rainfall is typically the impact and quite often that comes with above normal temperatures. The environment could be potentially threatening to sugarcane production, although every El Nino is different and so far this one has not had much influence, but that should change for Oct. through Feb.

Europe

Europe’s sugarbeets have been suffering from less than usual soil moisture resulting from poorly distributed rain and warmer than usual weather. The environment has not been nearly as tough as that of 2022 when excessive heat dominated the summer. Nevertheless, unirrigated beets may come up with lighter tonnage, but sugar levels will likely be a little higher to help make up the difference.

Though El Nino is just one factor of many that may affect the supply of sugar globally, as a leading trader of cane sugar it is imperative that we keep abreast of such risks as they inform our purchasing decisions. And as a refiner, having access to sugar from a wide variety of growing regions means our customers know we will deliver the goods, rain or shine, drought or flood.