News of Tonga’s volcanic eruption continues to affect the world. Industry insiders believe that if the volcanic eruption lasts for a long time, it may increase the probability of extreme weather, and it is necessary to continue to pay attention to the impact on spring planting in the northern hemisphere. Relatively limited; in terms of equity market, attention should be paid to the agrochemical industry chain, coal, petroleum, nuclear power, etc.
Increased probability of extreme weather
From the 14th to the 15th local time,Pacific OceanThe Hongahaapai volcano, about 65 kilometers north of Nuku’alofa, the capital of the island nation of Tonga, has erupted several times. The eruption on the 15th caused abnormal seawater activity in parts of Fiji, Samoa, Vanuatu, New Zealand and Australia, and these countries issued emergency tsunami warnings.
However, compared with earthquakes and tsunamis, the volcanic ash spewed by volcanic eruptions may have a far-reaching impact on the global climate, especially agricultural production, and deserves attention.
CITIC Futures pointed out that volcanic activity usually reduces the average temperature of the earth and is accompanied by abnormal precipitation in local areas. The abnormal climate brought about by volcanic activity may cause crop yield reduction. Take the eruption of Mount Tambora in 1815 as an example. Its intensity reached VE1-7. The drop in temperature caused widespread crop failures in Europe, North America, and Asia in the northern hemisphere. There was a widespread famine in Ireland. 12 cents skyrocketed to 92 cents.
Regarding this Tonga volcanic eruption, CITIC Futures stated that its eruption location is in the southern hemisphere, and the impact on the northern hemisphere is relatively small. The climates of southern Australia, southern Brazil, New Zealand, Argentina, Chile and South Africa in the middle and high latitudes of the southern hemisphere will be affected first.
In addition, it is also necessary to be alert to the impact of volcanic eruptions on wind and ocean currents. If the volcanic eruption lasts for a long time, it may cause too much aerosol to enter the stratosphere, increasing the probability of extreme weather, which will be detrimental to the good rate and yield of crops. Influence.
Limited impact on seaborne food crops
rightagricultural productsIn terms of the market, which varieties will be affected by this Tonga volcanic eruption?
CICCIt is believed that the VEI intensity of this volcanic eruption is 5-6, which is the strongest level since this century.Pacific OceanInternational shipping along the coast may be affected, and it is necessary to focus on the arrival of domestic US soybeans. In addition, the volcanic eruption may also exacerbate the market’s speculation on South American soybean and corn yields. In the long term, volcanic eruptions may accelerate this year’s La Niña’s transition to neutrality, and may also strengthen the formation of El Niño.
From my country’s point of view, El Niño mainly affects the climate of the Yangtze River Basin. The northern region is prone to drought and high temperature in summer, while the southern region is prone to low temperature and floods.The climate of cold in the north and waterlogging in the south may adversely affect the growth of wheat, corn, and soybeans in the north, and flood disasters may also affect the production of rice in the south.agricultural productsIn the context of low inventory, supply risks still exist, and we need to continue to pay attention to the impact of this volcanic eruption on spring planting in the northern hemisphere.
Guangzhou Futures believes that the volcanic eruption may cause the global temperature to be low, which in turn will have a certain impact on the cultivation of crops with high temperature requirements, such as corn. At present, the soybean planting in South America is coming to an end, and it is still uncertain whether the event will affect the local soybean yield.
From the perspective of grain shipping, it is expected that the route most affected by this volcanic eruption is the Cape Horn route. Since Argentine soybeans are still in the planting stage, and more ships are currently exporting Brazilian soybeans to my country, they choose the Panama route. Therefore, this time The Tonga volcanic eruption had relatively limited impacts on shipping, especially food crops.
Focus on agriculture, coal, oil, nuclear power and other sectors
Huatai SecuritiesIt is pointed out that from the experience of the eruption of Mount Pinatubo in the Philippines in 1991, about 20 million tons of sulfur dioxide clouds were injected into the stratosphere, resulting in a decrease of about 10% of the global light in that year. If the final impact of this volcano is similar, it may have a negative impact on global photovoltaic power generation.
In addition, if the ash spreads into the stratosphere, it may hit the aviation industry, but considering that there are relatively few routes in the southern hemisphere and the impact of this ash spread is expected to be less than the 2010 Iceland volcano eruption, it is necessary to focus on potential disruption to cargo routes.
If extreme weather disasters occur frequently around the world in 2022, the gap between agriculture and power supply may exceed market expectations, and it is worth continuing to track and evaluate the newly emerging volcanic eruptions in the Tonga sea that may have a butterfly effect on the global climate. Considering the hedging allocation of potential climate change and the domestic policy premium of primary product supply guarantee, sectors such as agriculture, coal, oil, and nuclear power still need to pay attention.
Western SecuritiesIt is believed that this volcanic eruption may lead to global climate anomalies and crop production reductions, which will make the supply and demand of the agrochemical industry more tense. It is recommended to pay attention to companies related to the agrochemical industry chain.
GF Futures pointed out that Tonga is located in the waters east of Australia and is not in the iron ore shipping routes of Brazil and Australia. It is expected that the tsunami may affect the shipping in a few days in the short term, but it will not affect the long-term iron ore transportation and supply. Will maintain a high and volatile trend.
(Article source: Chinasecuritiesnewspaper)