Food Production Shocks From "Unprecedented" El Nino May Push Global Prices Higher Into 2028
Economists are warning that a “super” El Niño weather cycle this year could cause a severe shock to global food prices lasting into 2028. As the Iran war pushes up world food prices to the highest level in three years, economists said supply chains faced “two shocks at once” stoked by extreme weather linked to global heating.
Scientists have said the 2026-27 El Niño – which forms when changes in wind patterns allow warmer water to spread across the central and eastern equatorial Pacific – has a historically unprecedented chance of developing into a “very strong” event fuelling heatwaves, flooding and stormier weather.
Informally described as a “super” or “Godzilla” El Niño, the US National Oceanic and Atmospheric Administration (NOAA) confirmed last month warming conditions were taking hold in the Pacific andthat there was a 63% chance of sea surface temperatures exceeding 2C above normal later this year. At a time when households around the world are already feeling the pinch from soaring living costs, experts say an extreme El Niño could add further to the pressure. The prospect of a renewed inflation shock is also rattling central banks, adding to concern that interest rates could be kept at elevated levels.
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According to UniCredit, the capacity for an extreme El Niño scenario does, however, remain high. This could lead to a 14.3% hit to global agricultural production – equivalent to $342bn (£254bn) in lost output, it said. “Price shocks could reach 10% to 50% across core commodities, while the most exposed crops – including rice, palm oil, sugar and coffee – could rise by 50% to 100% or more,” the bank said. “The food system enters the second half of 2026 with buffers, but with little margin for error.”
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https://www.theguardian.com/business/2026/jul/12/super-el-nino-severe-shock-global-food-prices-lasting-into-2028-economists-warn
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