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Super El Niño: Food Prices Could Skyrocket
13 Jul
Summary
- El Niño's strengthening could disrupt global agriculture and food supplies.
- Analysts predict a potential 15.8% jump in global food commodity prices.
- Extreme scenarios suggest a 14.3% drop in agricultural production.
A potent El Niño developing in the Pacific Ocean is raising concerns about escalating global food prices and supply chain disruptions through next year. The World Meteorological Organization forecasts this event will "strengthen rapidly," increasing the likelihood of extreme weather events worldwide. NOAA suggests an 81% probability of a "very strong" El Niño between October and December.
Economists and analysts warn that such an event could severely impact global agriculture. Goldman Sachs analysis suggests a potential 15.8% increase in global food commodity prices, with full realization by the second half of 2028. Some climate-risk firms project an "extreme" scenario with a 14.3% drop in agricultural production and price shocks of 10% to 50%.
While the U.S. may see limited impacts due to diversified supply chains, regions like Australia, South and Southeast Asia could face significant price hikes for wheat, rice, and palm oil. The greatest concern is for food security in rice-dependent Asian nations, where monsoon disruption could impact staple food availability.
