El Niño threat: 'Super El Niño' could push up global food costs

Forecasts from leading climate agencies and seasonal models now point to an elevated probability that a strong — and in a smaller number of model runs, a "super" — El Niño will materialize in late 2026 and extend into 2027, creating fresh downside risks for global agricultural production. The National Oceanic and Atmospheric Administration (NOAA) and inter-agency ENSO assessments have shifted to an El Niño watch as La Niña conditions fade.

Ensemble output from the European Centre for Medium-Range Weather Forecasts (ECMWF) and corroborating multi‑model systems indicate a high likelihood of at least a strong El Niño by late 2026, with a non‑negligible tail risk of a super event; academic work also shows that super El Niños amplify extreme weather and hydrological shifts. These signals have prompted forecasters to warn of wide regional impacts on rainfall, heat and storm patterns.

For markets, the transmission channel is clear: weather shocks reduce yields in ENSO‑sensitive regions, disrupt shipping and storage logistics, and raise the risk premium on staple commodities such as cereals, vegetable oils and sugar. United Nations food security reports already document how El Niño‑related extremes have deepened acute hunger in vulnerable countries, suggesting that any strong event would add upward pressure to global food price indices and increase volatility.

The prospective El Niño arrives amid existing geopolitical and supply constraints — including elevated transport and input costs — so the combined effect could be nonlinear for prices and for countries dependent on food imports. Historical precedent shows that major El Niño events can trigger simultaneous production shortfalls across multiple breadbaskets, complicating risk sharing and price stabilization efforts. Observed record warmth in recent months also raises the baseline vulnerability of crops and supply chains.

Market participants and policymakers should monitor sequential updates from NOAA, ECMWF and UN food agencies, alongside real‑time crop and trade flow data. In the near term this implies heightened hedging activity in commodity futures, close scrutiny of fertilizer and freight markets, and an increased emphasis on anticipatory humanitarian and trade policy measures to mitigate the most severe price and food‑security outcomes.