Now that Brazilian food prices are finally settling down, it looks like El Niño will strike back in a couple of months to throw the world’s weather into disarray.
Bad news for Brazil’s Finance Minister, Guido Mantega?
It could just as easily be a blessing, economists say. The changes in climate patterns caused by warmer Pacific waters could actually be a boon for Brazilian soy and corn producers while not necessarily disrupting other crops.
It is not clear yet if the El Niño phenomenon will happen this year – the odds are high at about 70 percent, according to the U.S. and Australian weather agencies.
But Brazil’s recent streak of bad luck in its fight against inflation has allowed many to question whether another shock might be brewing, just as the country recovered from a dry spell that sent food prices soaring and raised the threat of energy and water rationing.
Indeed, inflation expectations in neighboring Colombia are already going up on El Niño fears, according to a recent Reuters poll.