The most severe El Ni\u00f1o weather event on record threatens to push food prices higher this year, experts say, piling pressure on households already struggling with the post-pandemic spike in grocery bills and complicating the Reserve Bank\u2019s efforts to bring inflation back under control.<\/p>\n
The Bureau of Meteorology has forecast<\/a> El Ni\u00f1o will peak in late spring or summer and \u201creach levels above the warmest observed since reliable records began in 1950\u201d.<\/p>\n Michael Harvey, a consumer food analyst at Rabobank research, said the predicted hot and dry weather in key growing areas in eastern Australia was \u201cclearly one of the key issues that will have an impact on food pricing over the next 12 months\u201d.<\/p>\n Sign up for the Breaking News Australia email<\/a><\/p>\n The Food and Agricultural Organisation in its latest update<\/a> reported rising weather-related threats are already being reflected in high and climbing global commodity prices.<\/p>\n \u201cIt\u2019s a very volatile time, and there are lots of risks around cost re-escalation in the food system. There is absolutely risk of food inflation coming through at the consumer end,\u201d Harvey said.<\/p>\n Not all commodities are heading in the same direction, however. For example, dairy and meat prices are beginning to ease after a big recent rise as the underlying fundamentals in those markets shift independently of the looming weather event.<\/p>\n In Australia El Ni\u00f1o created a risk for what is still expected to be a strong winter wheat crop this year, Harvey said.<\/p>\n