Analysts are cautioning that a "super" El Niño weather cycle this year could lead to a significant global food price shock extending into 2028. The warning comes as the ongoing Iran war already drives food prices to their highest levels in three years, presenting supply chains with dual challenges from extreme weather and geopolitical tensions.
Impact of El Niño on Food Prices
The European Central Bank previously estimated that a strong El Niño could increase food commodity prices by as much as 9%. Recent analysis by Goldman Sachs suggests that the current El Niño could result in a staggering 15.8% surge in global food prices, with specific crops like soya beans, corn, and rice expected to be among the hardest hit.
The 2026-27 El Niño is projected to be particularly severe, with a 63% chance of sea surface temperatures exceeding 2°C above normal later this year. This phenomenon historically disrupts harvests worldwide, leading to potential droughts and flooding that could exacerbate the existing inflationary pressures.
Regional Variations and Consequences
El Niño's effects are not uniform; while some regions may benefit from warmer weather, others are likely to suffer. For instance, analysts at UBS noted that southern Africa and northern South America typically face elevated risks of drought, whereas areas like southern Brazil may experience flooding.
In India, where some regions have received only 50% of their usual rainfall, the impact on crops such as wheat, rice, and sugar cane could be severe. This has led to concerns about food supply not only in India but also in southeast Asia, where droughts may affect palm oil production, a critical ingredient in many processed foods.
- Projected food price increases:
- Goldman Sachs: 15.8% increase globally
- Eurozone: 1.3% increase
- European Central Bank: 9% increase from strong El Niño
Long-term Effects and Inflationary Pressures
The full implications of the El Niño cycle are expected to materialize gradually, potentially taking until the second half of 2028 to be fully realized. This delay is attributed to the varying planting and harvesting cycles of different crops, as well as logistical challenges such as water levels in shipping canals.
As the global economy grapples with rising living costs, the combination of El Niño and ongoing geopolitical strife, particularly from the Iran war, could lead to significant disruptions in the food supply chain. Analysts emphasize that even minor supply chain issues could lead to disproportionately large price increases.
🤖 This article was rewritten by Feed and Figures' editorial AI from a report originally published by Guardian Environment. Facts and quotes are preserved from the original; the rewrite focuses on clarity and structure. For the unedited original, see the source link below.
