Unusually high temperatures and dry weather worldwide have recently triggered a massive rise in international agricultural futures prices. According to the latest forecast by the World Meteorological Organization (WMO), the likelihood of El Ni?o between June and August 2023 is almost 70%, which could mean that this summer will be warmer.In addition, rising food prices are also a challenge for countries to inflation targets, and the world is closely watching the impact of climate abnormalities on financial stability.

Since this year, weather-related events have pushed up prices for some agricultural products.Sugar and cocoa futures have risen by more than 20%, influenced by feed prices, pigs, cattle and other livestock prices have risen significantly, and U.S. beef products prices have risen by more than 30%.The WMO recently published article said that the El Ni?o climate phenomenon is increasingly likely to occur in the year and is expected to bring high temperatures and extreme weather, further affecting food security issues, several major grain producers and exporters will face risks.

The international wheat, corn, and soybeans futures have launched a new round of price hikes due to worsening crop yields caused by bad weather in key production areas.The Australian Bureau of Agriculture and Resources Economy and Science (ABARES) said the next season will reduce local wheat yields by 34% to 26.2 million tons due to the return of the El Ni?o phenomenon.

The latest statistics from the U.S. Department of Agriculture (USDA) showed that, as of the week of June 18, the U.S. corn crop improvement rate was 55 percent lower than 6 percent last week, significantly below market expectations, with about 64 percent of U.S. corn production areas experiencing drought, 57 percent higher than previously.

The rising prices of agricultural products have already caused global economic uncertainty to heat up. The global economy has just begun to recover after the New Corona epidemic, but abnormal weather has brought serious obstacles to this process. The rising prices have led to an increase in living costs and consumer purchasing power weakening, and researchers predict that if food prices continue to rise, it will have a negative impact on the global economic recovery.

At the same time, rising food prices could also exacerbate global inflationary pressures.Many countries are already facing inflation threats due to large-scale stimulus schemes launched by central banks during the epidemic.As food prices continue to rise, this pressure may be even more severe and may lead to the need for central banks to raise interest rates, thus suppressing the pace of economic recovery.

While the rising prices of agricultural products in the short term put pressure, governments are actively responding, especially in reducing the impact of climate change. Many countries have already included climate change in their national strategies and are actively promoting sustainable development and a green economy. For example, the European Union has pledged to carbon neutrality by 2050, while investing large amounts of funds to promote green and digital transformation.

In addition, countries around the world are also exploring concrete measures to address fluctuations in agricultural product prices.Some countries are expanding their strategic reserves to prevent large fluctuations in food prices.Other countries are addressing uncertainty in agricultural supply by improving agricultural productivity and promoting technological innovation.

Overall, while the world is facing challenges caused by climate abnormalities, the international community is already aware of the seriousness of the problem and is jointly taking action to address it. Though there is still a long way to go, we have reason to believe that through global joint efforts, we are capable of addressing this challenge.