22 Oct 2015
AUD: EL-Nino is back again to haunt Aussie - ANZ
FXStreet (Delhi) – Research Team at ANZ, expect that the current severe El Nino weather event, which on current trends will soon be the strongest such event in a number of years has already seen a 15% reduction in Australian wheat yields.
Key Quotes
“But Australia may escape the worst of it. The worst of the dryness to date has been in Victoria, which is a much smaller grain producer than New South Wales, Western Australia and South Australia.”
“We’ve also had above-average rainfall in August which has helped sustain subsoil moisture, and slightly below average temperatures compared with other drought years.”
“As a result, we believe the impact on Australia’s GDP growth will be much less than what we experienced as a result of the 2002 and 2006 droughts. In each of these cases, farm output subtracted around 0.5ppts from GDP growth over a two year period. We’re not expecting that this time around.”
Key Quotes
“But Australia may escape the worst of it. The worst of the dryness to date has been in Victoria, which is a much smaller grain producer than New South Wales, Western Australia and South Australia.”
“We’ve also had above-average rainfall in August which has helped sustain subsoil moisture, and slightly below average temperatures compared with other drought years.”
“As a result, we believe the impact on Australia’s GDP growth will be much less than what we experienced as a result of the 2002 and 2006 droughts. In each of these cases, farm output subtracted around 0.5ppts from GDP growth over a two year period. We’re not expecting that this time around.”