- -Drought, heat and shifting rainfall patterns threaten key producing regions
- Rice, sugar, palm oil, cocoa and coffee face supply risks as El Nino strengthens
A powerful El Nino is strengthening in the Pacific Ocean, and the United Nations says its effects are already visible around the world.
El Nino is a natural climate cycle that begins when surface waters in the tropical Pacific warm well above normal. That shift reroutes the atmosphere's jet streams, drying out some farming regions while flooding others.
The UN weather agency, World Meteorological Organization (WMO), said on Sept. 3 that the phenomenon is firmly established and has a nearly 100% chance of continuing through February 2027.
Guatemala, Honduras and El Salvador are already suffering erratic weather and drought linked to El Nino, driving severe crop losses across Central America's "Dry Corridor." Indonesia has been battling wildfires that sent haze drifting into Malaysia and the Philippines.
Because so many food crops are grown in a handful of climate-sensitive regions, the ripple effects can show up months later in supermarket prices worldwide.
El Nino does not, however, automatically mean every commodity will become more expensive. The World Bank notes that its effects vary by crop and region, while the UN Food and Agriculture Organization (FAO) says global cereal supplies and stocks remain relatively strong despite weather risks.
At the same time, the combination of a strengthening El Nino, extreme weather and existing geopolitical and trade disruptions is already putting pressure on food markets. FAO said its global Food Price Index rose to 133.3 in August, the highest since November 2022.
Here are five commodities analysts and industry groups say are most exposed.
Rice
Rice is one of the crops most consistently identified as vulnerable to El Nino because much of its production is concentrated in South and Southeast Asia, where the weather pattern can reduce rainfall.
India alone handles about 40% of global rice exports. During the 2023 El Nino, New Delhi banned most non-basmati rice exports as domestic prices climbed, a move exporters said had a bigger impact on world markets than Russia-Ukraine war had on wheat.
This year, the US Department of Agriculture has already flagged a below-average Indian monsoon as a risk to rice, cotton and other crops.
In September, Indian rice export prices reached their highest level in a year amid concerns over below-normal rainfall, while prices in Thailand and Vietnam also rose.
The World Bank estimates that severe El Nino cycles can slash regional rice output by 20% to 50%.
For consumers, lower harvests or tighter exports can raise the cost of rice in importing countries, particularly in Asia and Africa, where the grain is a staple food.
Sugar
Sugarcane is highly dependent on adequate rainfall, making major producing regions in Asia and South America vulnerable to prolonged heat and dry conditions.
The FAO said its sugar price index jumped 11.9% in August, with weather-related production concerns in Brazil, Europe and Asia contributing to the increase. The agency also cited anticipated El Nino risks to sugar production in Asia.
India, the world's second-largest sugar producer, has already faced pressure on supplies and has restricted exports, while its government has allowed some duty-free imports to help replenish domestic supplies.
A tighter global sugar market can raise costs for products ranging from soft drinks and chocolate to processed foods.
Palm oil
Indonesia and Malaysia together produce roughly 85% of the world's palm oil, an ingredient found in everything from packaged snacks and instant noodles to soap and cosmetics.
Extended rainfall deficits and high temperatures linked to El Nino reduce fresh fruit bunch yields on oil palm plantations.
Indonesia is already battling wildfires that have sent haze drifting into Malaysia and the Philippines. The country's meteorological agency has separately warned that some provinces, including Kalimantan, Papua and Java, face a real chance of a drier September-to-November period than even the severe 1997 El Nino brought.
Because palm oil is cheaper than other vegetable oils and widely used as a substitute, a supply squeeze tends to push up costs across the broader edible-oils market, not just for palm oil itself.
Cocoa
Cocoa production is heavily concentrated in West Africa, particularly Cote d'Ivoire and Ghana, leaving the market sensitive to changes in rainfall and temperature.
Cote d'Ivoire, the world's largest cocoa producer, slowed forward sales for its 2026/27 crop in June because of concerns that El Nino could bring drought and reduce yields.
The International Cocoa Organization said in its latest quarterly bulletin that cocoa prices remained highly sensitive to weather and production risks and specifically noted growing concerns about the potential impact of El Nino.
Analysts note the crop is especially vulnerable this cycle because much of West Africa's cocoa acreage is now more than 25 years old, past its most productive age, leaving trees less able to withstand heat and drought stress.
Coffee
Coffee is vulnerable because major growing areas in Southeast Asia and Latin America can experience heat, drought or excessive rainfall during El Nino events.
Vietnam, the world's second-largest coffee producer and a leading supplier of robusta beans, is particularly important.
USDA says the country accounts for about 17% of global coffee production and warns that El Nino's warmer and drier conditions could reduce coffee productivity and production.
