Could El Niño Trigger a Global Food Crisis by 2027?
The El Niño climate pattern could weaken crop yields this year, spike food inflation and add to the threat of a global food crisis in 2027, according to reports. JP Morgan warned of food inflation in the first part of next year as a potentially historic El Niño, combined with disruptions around the Strait of Hormuz caused by the Iran war and other factors, have created a perfect storm for food production capacity. JP Morgan senior global economist Nora Szentivanyi said in a report that successive shocks since COVID-19 have compounded, keeping food price pressures elevated into 2027. The report echoes previous warnings about the pressures on food supplies, with institutional desks, including Goldman and HSBC, warning of mounting food inflation risks. On June 30, the charity Mercy Corps warned of a food security shock caused by the Iran war and El Niño. ...It said fertilizer and fuel shocks have already collided with planting windows in some of the world’s most fragile food systems, and that El Niño conditions are expected to strengthen into the end of the year. “A strong El Niño is now forming, and extreme weather will compound the financial and food security shocks of the war,” Mercy Corps VP Policy & Advocacy Kate Phillips-Barrasso told Newsweek.Malligeswari Panneerselvam, senior manager, cost & price analytics at Beroe, a procurement intelligence firm, told Newsweek on Monday that El Niño is expected to reduce Indian and global rice yields."The impact would remain primarily supply-driven, with global rice prices likely rising by 10-20 percent due to El Niño-related yield losses and tighter availability," Panneerselvam said. What Is El Niño? El Niño is a climate pattern that features warmer-than-average sea surface temperatures in the central and eastern tropical Pacific. It usually means there are wetter conditions for the southern U.S. including the Gulf Coast and Southeast, while the northern U.S. and Canada remain warmer and drier than usual. The National Oceanic and Atmospheric Administration’s Climate Prediction Center said there was a 69 percent chance that conditions between October and December could reach “historic” strength, surpassing every recorded El Niño event. A super El Niño could change temperature and rain levels across several continents for months. Vulnerable regions could face disruptions to food production, water security and fisheries.Meanwhile, the United Nations warns that El Niño typically elevates drought risks in Central America, Southeast Asia, the Sahel and southern Africa while increasing flood hazards in east Africa and South America. Graphic by Jonathan WALTER and Valentina BRESCHI / AFP via Getty Images)What Is Driving Food Inflation? In its report titled Food Security Is National Security: A Compounding Storm, JP Morgan said that the next global food crisis may already be forming because of the “Five W's: War, Weather, Warehousing, Water, and Waste."Szentivanyi said in the report that “this is not a short-lived shock” and predicted that the food inflation cycle is likely to exert pressure through the first half of 2027, accelerating from 2.8 percent in the first half of 2026 to 5 percent for the same period next year. “EM [emerging markets] bears the brunt of El Niño. The largest food inflation responses are concentrated in EM Asia and Latin America, where weather-sensitive agriculture plays a larger role in economic activity," Szentivanyi said. "India, Colombia, Indonesia, Brazil, Taiwan and Korea emerge as among the most sensitive economies." Iran closed the Strait of Hormuz following the U.S. and Israel launching strikes on the Islamic Republic on February 28. That risks global fertilizer supply because the Middle East accounts for a large share of the world’s potash and urea exports. Mercy Corps said on June 30 that there needed to be urgent action, including pre-positioned agricultural inputs, cash-transfer adjustments, protection of humanitarian supply chains, and anticipatory El Niño financing. "Today’s disruption could still mean smaller harvests, higher food prices, and deeper hunger later this year and into 2027," it told Newsweek. Meanwhile, in a report released last Friday that was shared with Newsweek, the Oxford Economics think tank said another critical waterway, the Panama Canal, cut vessel drafts five times this year as El Niño threatens to drain its water supply. Additionally, typhoons twice shut the world's busiest container ports in a month. "The sharpest impacts of past El Niño events have tended to arrive the year after they peak—which points to 2027 as the period of greatest risk," Oxford Economics said.Panneerselvam said there is usually a delay between disruptions at the farm level and changes in retail prices because of existing supply contracts, stocked inventories and hedging by buyers. "As a result, even when El Niño affects harvests, consumers do not feel the full impact immediately at the store, as prices adjust gradually over the following months," she said.Also in India, the emerging El Niño risk, combined with below-average monsoon forecasts, could reduce sugarcane output by up to 6 percent in the 2026/27 season, Panneerselvam said. As a result of supply chain lags, inventory effects, policy interventions, base effects and secondary inflation effects, the economic impact of major shocks typically persists for up to 24 months beyond the initial event. "In more stressed scenarios, these effects can extend into late 2027," Panneerselvam said, "even after the original shock such as El Niño has weakened."Contact Newsweek editors on this story: Ben Kelly and Dave Siminoff.
