Impact of El Niño on Global Food Prices and Agricultural Commodities

The current El Niño event, one of the strongest in recent history, is poised to intensify global food insecurity and increase prices for agricultural commodities on a worldwide scale. In August, the United Nations Food and Agriculture Organization reported that global food prices reached their highest levels since 2022, as several major crop-producing nations have faced challenges due to the ongoing El Niño climate phenomenon, which commenced earlier this year.

Heat-related deaths might exceed 450,000, according to Michael Greenstone, co-founder of the Climate Impact Lab and distinguished professor at the University of Chicago. This alarming projection underscores the potential impact of this climate pattern on supply chains and dependent populations worldwide.

“Extreme weather associated with El Niño will likely impact agricultural output especially in South and Southeast Asia, as well as Western Africa,” stated Matin Qaim, a professor of Agricultural Economics at the University of Bonn. “I am particularly worried about impoverished populations who already allocate a significant portion of their income to food; higher prices will further strain their purchasing power.”

Potential Price Hikes

The Global South is anticipated to experience severe setbacks due to El Niño, leading experts to identify several food commodities likely to experience shortages. These include chocolate, olive oil, and coffee, which may become more scarce and more expensive for U.S. consumers.

Kamiar Mohaddes, a professor of economics at Cambridge University, highlighted that “Chocolate and sugar are quick to react, given their slim global buffers this year. It requires minimal disruption to elevate their prices. Wheat’s shortfall directly affects bread costs while coffee and palm-oil-based products respond three to sixteen months later, extending these effects into 2027.”

Mohaddes also noted concern over wheat production nearing a 56-year low and potential drought-related risks to rice imports from India, Thailand, and Vietnam.

Amanda Maycock, a climate scientist at the University of Leeds, stated that El Niño caused a reduction of 10 percent to 15 percent in rainfall during India’s monsoon season, subsequently hampering rice production. She added that other tropical crops like coffee and cocoa might be affected by both excessive rainfall and drought-related poor yields.

Duration of Impact

The U.S. is likely to avoid the severe food shortages linked to El Niño. Nelson Villoria, an agricultural economist at Kansas State University, reported that diminished yields of crops such as corn will be largely compensated by production shifts within other states. He emphasized that despite potential import challenges, “major food group shortages are unlikely in the U.S.”

In contrast, Qaim expressed concerns that many impoverished countries in Africa and Asia, reliant on grain imports for food security, might face increased hunger. He also mentioned the exacerbation of existing shortages linked to obstructed shipping routes in the Middle East, predicting a rise in food prices lasting six to twelve months or longer.

Mohaddes projected a global food price increase in the “mid-teens percentage” range, noting that the effects might persist for up to two years given that the event is building towards a peak anticipated around December 2026.

An analysis from Goldman Sachs, referenced by The Guardian in July, predicted a near 16 percent rise in global food commodity prices, with full realization possibly occurring by the latter part of 2028.