Overview of El Niño’s impact on food commodities
- Rice faces major risks from drought, erratic rainfall and exports
- Sugar supplies face pressure from drought, shortages and restrictions
- Coffee, cocoa and palm oil remain vulnerable to weather shocks
- Soybeans, wheat and maize could benefit in some regions
- Food companies should strengthen sourcing resilience and reformulation planning
El Niño, the natural phenomenon that causes the periodic warming of the central and eastern equatorial Pacific Ocean and disrupts weather patterns around the world, gets its name from the Spanish for “little boy” or “Christ child”. This year, El Niño is more monster than little boy.
In June, the UN Food & Agriculture Organisation (FAO) and World Food Programme (WFP) issued their first-ever joint appeal in response to what’s been termed the “Godzilla El Niño”. They called on governments to contribute to a $220m fund to protect 9 million people from the risk of starvation in 22 of the world’s poorest countries in Asia, Africa, Latin America and the Caribbean. [[1]]
Godzilla El Niño sounds like hyperbole until you consider the current scale of change. To be classed a “Super El Niño”, sea surface temperatures must rise by 2°C or more [[2]] – during the Super El Niño of 1998, which caused an estimated $5.7tn in global economic losses in five years [[3]], they rose by 2.8°C. [[4]] The September 2026 average was 3°C above average; by November, they’re forecast to be up by 4°C. [[5]]
El Niño isn’t new. First documented by Spanish surveyor Francisco de Alcocer in 1578 after torrential rain caused biblical landslides, crop failures and plagues of rodents in usually arid northern Peru, it got its name in following centuries when coastal communities noted its recurrence every two to seven years, usually coinciding with Christmas (hence “Christ child”). What’s new is its magnitude.
“While El Niño is a recurring climate cycle of warming Pacific waters and weakening trade winds, the 2026-2027 El Niño looks to be significantly more severe than previous cycles,” says Oliver Carpenter, head of environmental analytics at climate risk consultancy Risilience, which has warned that the world is facing a 14% fall in agricultural production worth $342.2bn in the next two years due to El Niño.[[6]]
“It is likely that climate change has supercharged this cycle, acting as a powerful risk multiplier, layering extreme natural variability on top of an already elevated baseline. Unlike a more localised extreme weather event, a Super El Niño has the potential to create simultaneous disruption across multiple agricultural regions and food categories.”
The risk is multiplied by humanity’s overreliance on a small number of crops, grown in concentrated areas of land. Despite there being more than 6,000 crops known to humankind [[7]], our species relies on just three – rice, maize (corn) and wheat – for an estimated 60% of our calories. [[8]] Soybeans, sugar, oil palm, coffee and cocoa also make significant contributions to global trade, of course.
Rice is the world’s most widely consumed grain and the main source of calories for about half the global population. [[9]] It’s also one of our thirstiest crops, requiring 3,000 to 5,000 litres of water to produce a single kilo. [[10]] That makes rice – and the billions of people who rely on it as a staple food – particularly vulnerable to disruptions to normal rainfall patterns.
“Rice is a particular concern, given the concentration of production in countries including India, Vietnam and Thailand,” says Carpenter at Risilience, which has warned that as much as 26% of global rice production would be impacted if the worst predictions for this year’s El Niño come to pass.
India, Thailand, Vietnam and Pakistan account for almost two-thirds of global rice exports and have all experienced erratic rainfall in recent months, characterised by prolonged dry spells interrupted by sudden, destructive deluges. [[11]] India – the world’s largest exporter, responsible for more of the global rice trade than Thailand, Vietnam and Pakistan put together – has been hit particularly hard.
“In terms of rice production, India’s monsoon is approximately 13% below normal,” says Rob Weston, CEO of agricultural intelligence platform CropGPT. “In Andhra Pradesh and Telangana – two of the world’s biggest rice producing areas, supplying more rice than North and South America combined –August data shows rainfall is down by 46% and 63% respectively. That could reduce crops by over 20%.”
Conversely, other rice-exporting countries – such as the US and Italy, which respectively account for 5.7% and 2.8% of the global rice trade [[12]] – may benefit from El Niño. According to the FAO, the southern US and western Europe (as well as parts of Latin America) typically see wetter conditions during El Niño events, raising the possibility of more favourable conditions for rice and other crops there. [[13]]
“Arkansas and Louisiana [respectively responsible for around 40% and 10% of US production – [14]] typically experience wetter and cooler winters and springs during El Niño, which can provide favourable soil moisture and water conditions going into planting,” says Eszter Somogyi, director for Europe, Middle East and Africa at USA Rice, which represents growers from the world’s fifth largest rice exporter. [[15]]
However, Somogyi warns against simplistic predictions relating to El Niño’s impact on specific crops or regions. “If wet conditions persist too far into spring, they can delay planting and push some acres into fallowed or preventive-plant status,” she says. “It would be easy to assume that regions associated with El Niño-related drought will automatically face supply disruptions. In reality, the picture is more nuanced.”
She points out that California – the second biggest rice growing region in the US, accounting for around 20% of national production – experienced 31% more rain than average in 2019 (a weak El Niño year) while in 2024 (a strong El Niño year), the state had 19% less than average. “El Niño changes the odds, but it is not the only factor determining rainfall in a particular growing region,” adds Somogyi.
“Jet streams, storm tracks, regional pressure patterns and other ocean-atmosphere systems can amplify, weaken or even override the El Niño signal… in California, for example, high pressure in the Northeast Pacific can steer storms towards the Pacific Northwest rather than California’s Central Valley. Water allocation decisions also have a significant bearing on how much is available to agriculture.”
Government policy is a major factor for all traded crops, of course. “We’re analysing potential impacts on commodities including palm oil, coffee, soybeans and sugarcane, where disruption in key growing regions could have significant knock-on effects,” says Carpenter. “If major shortfalls occur, government intervention through export restrictions could remove significant volumes from global markets.”
In the case of sugarcane, this has already happened. In May, India – until then world’s second largest sugarcane exporter [[16]] – ceased nearly all overseas shipments of the crop in response to worsening drought conditions across the country. Cumulative rainfall in the key sugar-growing regions of Karnataka, Andhra Pradesh and Tamil Nadu is down 28%, 30% and 32% respectively so far this year. [[17]]
It’s not just India. “Simultaneous water stress across separate parts of the global sugar supply is going to have a severe impact,” says Weston at CropGPT. “Beet production is already down by 22% in Germany and 15% in France, with cane sugar crops down 7% in India and 7.5% in Thailand. Compounded by fertiliser shortages, food prices are bound to increase.”
Indeed, in August, raw sugar prices recorded their strongest monthly gain since October 2010, [[18]] driven by weakening production across Europe, India and Brazil, the world’s biggest sugar exporter. [[19]] However, while El Niño has contributed to drier weather and falling production in Asia and Europe, it has contributed to wetter, more favourable growing conditions in Brazil.
Nevertheless, Brazil’s overall white sugar production has been hampered by delayed harvests (again, partly due to wet conditions associated with El Niño) and the diversion of sugarcane to produce biofuels. This has become more attractive for Brazilian sugarcane mills, which have the capacity to switch between white sugar and ethanol production, as fuel prices have soared in the wake of the Iran war.
El Niño is contributing to more favourable growing conditions for other crops elsewhere too. US soybean production is forecast to increase by 2.3% year-on-year in 2026, for example, while China has reported a 1.7% increase in soybean production and Paraguay a 12.6% increase. [[20]] “Relatively strong conditions across the US are helping to offset losses elsewhere,” says Weston.
“Some of the [US soybean] increase can be attributed due to an increase in the area planted rather than improved yields. While the core Midwest region remains well-watered, severe heat and drought have affected crops in Arkansas and Mississippi, with Kansas and Missouri also experiencing weather-related pressures.”
Annual crops like soybeans, wheat and maize – which commentators suggest may benefit from improved soil moisture in parts of the US and South America due partly to the impact of El Niño – may find themselves at an advantage over perennial crops that take longer to bear fruit, as weather patterns become more erratic and difficult to predict.
“For perennial trees like cocoa, coffee and palm, you really cannot plant your way out in 90 days,” says independent agrifood advisor and cocoa expert Raphaël Felenbok, who notes particular vulnerability for cocoa and oil palm, with more than half of the former being grown in Ghana and Ivory Coast [[21]] and 80% of the latter coming from Indonesia and Malaysia. [[22]]
“Procurement teams should have upstream transparency and visibility in order to properly map out risk. Most companies know their tier-one suppliers far better than they know their origin concentration, and a procurement book that looks well diversified across eight suppliers can turn out to be sourcing from two countries sitting under the same weather risks.”
Increasingly erratic global weather patterns require greater agility from food companies, suggests Felenbok, who adds that several companies were stung by not acting quickly enough during the cocoa price shocks of 2024. “I saw companies only start to act once cocoa prices had exceeded $10,000 per tonne, which was all a little too late,” he says.
“The best advice is to start reformulation – including testing out recipe changes, undertaking consumer testing, and refiguring labelling – early. All of this can take nine to 18 months. For teams under pressure, it’s vital to know the breaking point for each product, and at what ingredient price the margin no longer works. It’s always important to have alternatives ready before reaching that breaking point.”
In other words, act now.
Sources
[1] FAO – https://www.fao.org/newsroom/detail/fao-and-uk-launch-anticipatory-action-to-reduce-el-ninos-impact-on-at-risk-communities-in-somalia/
[2] Columbia Climate School – https://news.climate.columbia.edu/2026/06/09/you-asked-what-exactly-is-a-super-el-nino/
[3] Science – https://www.science.org/doi/10.1126/science.adf2983
[4] Columbia Climate School – https://news.climate.columbia.edu/2026/06/09/you-asked-what-exactly-is-a-super-el-nino/
[5] Climate Dashboard – https://dashboard.theclimatebrink.com/#enso
[6] Risilience – https://risilience.com/el-nino-2026/
[7] FAO – https://www.fao.org/interactive/state-of-biodiversity-for-food-agriculture/en/
[8] FAO – https://www.fao.org/4/u8480e/u8480e07.htm
[9] FAO – https://www.fao.org/4/y4347e/y4347e01.htm
[10] WWF – https://assets.wwf.org.uk/downloads/thirstycrops.pdf
[11] World’s Top Exports – https://www.worldstopexports.com/rice-exports-country/
[12] World’s Top Exports – https://www.worldstopexports.com/rice-exports-country/
[13] FAO – https://www.fao.org/4/y4347e/y4347e01.htm
[14] USA Rice – https://www.usarice.com/thinkrice/discover-us-rice/where-rice-grows
[15] World’s Top Exports – https://www.worldstopexports.com/rice-exports-country/
[16] Rabobank analysis – https://www.foodnavigator.com/Article/2026/06/30/will-indias-sugar-export-ban-shake-up-global-food-markets/
[17] CropGPT
[18] CNBC – https://www.cnbc.com/2026/09/06/sugar-is-outperforming-the-stock-market-this-year-whats-driving-it.html
[19] Rabobank analysis – https://www.foodnavigator.com/Article/2026/06/30/will-indias-sugar-export-ban-shake-up-global-food-markets/
[20] CropGPT
[21] SPSC – https://www.kakaoplattform.ch/about-cocoa/cocoa-facts-and-figures
[22] WWF – https://wwf.panda.org/discover/our_focus/food_practice/nature_positive_production/palm_oil/asia_programme/
