- The effects of El Niño may not be visible for another 6–12 months.
- The greatest risk concerns rice, sugar, and coffee in Asia.
- Australian wheat production could fall by about 9 million metric tons.
- Argentina may benefit from heavier rainfall and better conditions for grains.
The market may not feel the effects for several months
El Niño’s impact on the agricultural market does not necessarily occur simultaneously with changes in conditions in the Pacific. The most significant consequences for crop yields, supply balances, and food prices usually occur with a delay of six to twelve months. This means that current price levels may not yet fully reflect the risks to future production cycles.
High temperatures pose an additional threat, as they can worsen growing conditions. The soil dries out faster, plants have less water, and they feel the effects of drought sooner. Even if supply does not decline immediately, new weather forecasts and harvest reports may cause greater price volatility.
Varying Impacts on Harvests Across Regions
The greatest risk concerns South and Southeast Asia. A weaker monsoon and higher temperatures could reduce rice, sugar, and coffee harvests. In the case of rice, potential export restrictions pose an additional threat if producers seek to protect their domestic markets from rising prices.
Problems may also affect Australian wheat, whose production in the 2026/27 season could fall by about 9 million metric tons. On the other hand, heavier rainfall could improve conditions for soybeans, corn, and wheat in Argentina. El Niño does not necessarily mean higher prices for all commodities, but it may widen regional disparities and cause greater volatility in certain markets.
