Economists Warn El Niño Could Trigger New Wave of Food Price Hikes

The world may face a new surge in food prices in the coming months, driven not only by geopolitical tensions but also by a weather phenomenon meteorologists are closely monitoring. Economists caution that an exceptionally strong El Niño, anticipated between 2026 and 2027, could severely disrupt agricultural output and food supplies globally, with consequences potentially extending to 2028.

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The world could face a new strong rise in food prices in the coming months, and the reason this time is not only geopolitical tensions, but also a weather phenomenon that meteorologists are closely monitoring.

These warnings arrive as food prices are already strained by the conflict in the Middle East. Experts highlight that the combination of war and extreme weather could further burden global supply chains. The U.S. National Oceanic and Atmospheric Administration (NOAA) estimates a 63% probability of Pacific Ocean surface temperatures exceeding the average by more than two degrees Celsius this year, increasing the likelihood of a powerful El Niño. Such conditions are linked to heatwaves, droughts, floods, and more intense storms.

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There is a 63 percent probability that the surface temperatures of the Pacific Ocean during this year will be more than two degrees Celsius above average.

Analysts predict that extreme weather could fuel renewed inflation, particularly for food. UniCredit forecasts that El Niño might amplify climate change impacts, intensifying pressure on staple food prices. Goldman Sachs estimates a nearly 16% rise in global agricultural commodity prices. This could translate to a roughly 1.3% increase in retail food prices across Europe.

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El Niño could further amplify the consequences of climate change and increase pressure on the prices of basic food products.

The effects of El Niño will not be immediate, as weather disruptions first impact crop production before rippling through the entire food chain. Due to varying planting, growth, and harvest cycles, along with logistical challenges, the full impact might not be felt until the latter half of 2028. UniCredit projects a potential 14.3% drop in global agricultural production in a worst-case scenario, amounting to a loss exceeding $340 billion. Prices for key agricultural products could rise 10-50%, with rice, palm oil, sugar, and coffee potentially increasing by over 100% in extreme scenarios. Experts stress that the coming months are crucial for Pacific weather developments and the stability of the global food market.

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Prices of agricultural raw materials on the world market could rise by almost 16 percent.