I remember hearing once or reading somewhere a statistic that a world wide volcanic event can lead to an 11% increase in the price of wheat. Not sure why that random statement sticks in my head but have been watching the eruption coverage in iceland with some thoughts about potential effects for French and Ukraine Wheat output. Any thoughts on the potential effect of the eruption on world ag markets? Just wondered if anyone has given it thought or i could just be blowing my top.
http://elainemeinelsupkis.typepad.com/earth_news/2008/05/elaine-meinel-1.html an interesting article. not rather scientific. but if does speak of the cool wet summer volcanic effect.
I remember reading the Pinatubo eruption had tremendous effects on world climate and asian crops at the time, but this islandic eruption is a lot smaller I guess.
I was reading a piece about this today. The current eruption is both smaller and in high latitude. Eruptions in the tropics apparently have a greater effect on climate because the emitted sulphur dioxide is more likely to be carried upwards into the stratosphere and dispersed around the globe. At higher latitudes, the winds carry it towards the pole without the same upward force into the stratosphere. So the likely effect on climate should be a lot less than Pinatubo. http://www.wunderground.com/blog/JeffMasters/comment.html?entrynum=1462
The 'experts' seem to think the ash cloud is abating but so long as it is still emitting ash the more likely it is to affect weather patterns over the next 1-2 years. Especially if neighbouring Katla blows - that could be a real game changer... I did a little research and after the 1783-84 Laki eruption in Iceland you had the lowest ever winter average temperature in Eastern USA, average temperatures 4.8 degrees below the 225 year average...reports of "unusually harsh winter...spring flooding...Mississippi froze at New Orleans...barely crops 'brown and withered'...as did the leaves of the oats...rye had the appearance of being mildewed" Same thing with 1815 eruption in Tambora, Sumatra - 1816 being the "year without a summer"...rapid temperature swings, June 1816 two snowstorms in Eastern Canada and New England, big effect on American North East, New England, Canadian Maritimes, Newfoundland, New England, frost killing off most of the crops that had been planted....oats rising in price from 12cents/bushel to 92 cents/bushel.
If this prediction were to repeat perhaps it's worth buying some inexpensive deep OTM calls or call spreads in ZOZ 11 and ZWN 11
magma chamber on Katla is 100x bigger than Eyjafjallajokull (had to check spelling for this one..I'll call it E-jokull from now on!). Every time E-jokull erupted in the past Katla erupted within one year and caused much more devastation...
this is how you say Eyjafjallajökull:- http://upload.wikimedia.org/wikipedia/commons/1/10/Eyjafjallajökull.ogg Zerohedge:- http://www.zerohedge.com/article/forget-eyjafjallajokull-mt-katla-now-getting-ready-rumble