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Super El Niño risks pushing global food prices higher into 2028

Economists warn the weather cycle could drive up food commodity prices by as much as 9%, intensifying inflation pressures already elevated by the Iran war.

Reported · Written up by our desk · Emerging Markets

European and other analysts warn a potentially very strong El Niño this year could trigger a prolonged shock to global food prices, with effects lasting into 2028. The concern comes as food prices are already near their highest level in three years due to the Iran war, and researchers say supply chains face “two shocks at once” from the combination of conflict-related price pressure and extreme weather tied to global heating.

The European Central Bank estimated three years ago that a strong El Niño could raise food commodity prices by up to 9%, with soybeans among the crops most affected. The article also cites NOAA guidance that warming conditions are taking hold in the Pacific and points to a 63% chance that sea surface temperatures will exceed 2C above normal later this year, a scenario scientists associate with heatwaves, flooding, and stormier weather.

Conditions linked to El Niño have potential to disrupt key harvest regions. The piece notes that parts of India have received only about half of normal rainfall, which could affect supply for wheat, rice, and sugar cane.

Analysts say renewed food price inflation could complicate central bank decision-making and keep interest rates elevated. UniCredit economists, cited in the report, said El Niño puts “climateflation” back on the agenda, arguing that the climate baseline is already shifting and could add further pressure later this year.

Latest closeWheat $639.25 ▲4.6%|Soybeans $1,189.50 ▲0.8%|Sugar $14.86 ▼1.7%

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