Dr David Jones, head of climate analysis at the Bureau of Meteorology in Melbourne says that unlike earlier El Ninos the effects of this one could be worse, because water stocks already are low.
The El Nino phenomenon involves an extreme warming of equatorial waters in the Pacific Ocean, bringing drought to eastern Australia, Indonesia and Papua New Guinea.
Last month, the bureau predicted neutral conditions for the return of El Nino, but today the US National Oceanic and Atmospheric Administration (NOAA) said an El Nino had formed and will last into 2007.
Farmers struggling
"The Americans have said, `Yes, formally, we are going to call this'," Dr Jones said.
"But the bureau's position is that we are on the cusp and the chances are it's going to develop into one.
"The trick with an El Nino is that it has to reach a certain (ocean warming) strength and then it has to last for a while.
"We are more or less at the strength which is typical of an El Nino event, so the oceans are as warm as what they usually are during El Ninos.”
Australia recorded its driest August since accurate record-keeping began in 1900 and it was also the warmest since detailed monthly temperature data came on line in 1950.
Associate Professor Stewart Franks, from Newcastle University, said a new El Nino spelled bad news for struggling farmers and for large parts of Australia that had not enjoyed good rains since the last El Nino in 2001-2003.
What was perhaps more significant was that water supplies already were so low that a new El Nino posed a threat to urban populations, Prof Franks said.