Aug. 19 (Bloomberg) -- El Nino weather conditions, which can bring drought to Asia and cause flooding in South America, are more likely this year because of a warming of the central Pacific Ocean, the Australian government's weather forecaster said.

The Commonwealth Bureau of Meteorology's assessment follows falling values on the so-called Southern Oscillation Index, which tracks monthly fluctuations in air pressure between Tahiti and Darwin. The index fell to minus 14 in June from 13 in May. It averaged minus 6.9 last month and was at minus 15 today.

``Ocean surface temperatures remain significantly higher than average in the central Pacific Ocean, the Southern Oscillation Index is persisting in negative values for the third successive month, and cloudiness has increased around the equatorial dateline,'' the bureau said in a report on its Web site. ``These are all classic signatures of a developing El Nino.''

An El Nino-induced drought could slash output of palm oil in Malaysia and Indonesia, source of four-fifths of the world's supply of the oil, and grain in Australia, the world's second- biggest wheat exporter.

Based on rainfall so far this year and the outlook for the next three months, wheat yields across Australia may decline to an average of 1.5 tons a hectare (3.7 tons an acre) this year, compared with a long-term average of 1.78 tons a hectare, Andries Potgieter, a research scientist with Queensland state's Department of Primary Industries & Fisheries in Toowoomba, said this month.

That could wipe 3.5 million tons from a harvest of 12.51 million hectares of crops, lowering output from the next October- to-January harvest to 18.8 million tons, compared with a record of 25.2 million tons a year earlier. Australia accounted for about 14 percent of global trade in wheat last year.

Shares of AWB Ltd., Australia's monopoly wheat exporter, fell to a three-month low of A$4.48 yesterday and have declined more than 4 percent since the National Oceanic and Atmospheric Administration's Climate Prediction Center in Camp Springs, Maryland, said on Aug. 5 that an El Nino weather pattern is expected to develop during the next three months.

To contact the reporter on this story: Jason Gale in Melbourne at j.gale@bloomberg.net.

Last Updated: August 18, 2004 20:46 EDT