— This is the script of CNBC's news report for China's CCTV on July 25, 2018, Wednesday.
We can see that, from July, many Southeast countries have suffered from heavy rain, at the same time; bad weather also puts economic pressure on many Southeast Asian countries that rely on agricultural exports. We haven't got the specific data about agricultural loss till now, however, we can have a look over its potential influence from several aspects. First of all, the damage caused by floods and weather disasters to crop yields has triggered fluctuations in the prices of various types of commodities in recent days.
For example, rice and sweet corn are one of the assets destroyed by flood in Southeast Asia. The recent heavy rains in Cambodia, Laos, the Philippines and Vietnam will undoubtedly affect local crop production.
But the flood in some area maybe just a small part of challenge, EI Nino may come in autumn this year, because of hot weather in following days, and that will continue to cause loss in agricultural products. So many countries have downgraded the export scale of agricultural products considering weather worries. For example, Thailand is expected to ship out 9.5 million tons of rice this year; this number has declined compared to that in 2017. This is because they worry bad weather will affect the crops.
On a global scale, if EI Nino comes this year, then Southeast area will experience drought, benefiting palm oil price, Australia will experience less rain and drought, boosting wheat price. If drought happens in India, the price of sugar and other products will increase; rainfall in Brazil will raise soybean price, in addition, the rainstorms in Argentina may cause the price of corn and wheat rise.
Price rise as the decline was shown in production and export. Some risk analysis and evaluation companies pointed out that extreme weather will cause economy loss in society, and that is called Hot Stress, saying the continued increasing temperature will disturb the natural adjustment system to health and productivity of human beings and animals. And according to related data, hot stress and climate change cause a USD300 billion loss each year. Southeast Asia is the one that suffers the greatest loss of labor because of hot stress. It is expected that by 2045, the labor reduction in Southeast Asia will reach 16%, if the extreme weather is frequent. And the labor loss in Singapore, Malaysia, and Indonesia is 25%, 24% and 21%, respectively. Philippines will have 16% reduction. We will keep an eye on the weather influence to financial market.