How the 2026–27 El Niño Could Drive the Next Global Food Price Spike

Reduced rainfall and heat stress can damage yields for both staple crops and export commodities. Particularly sensitive crops include:

• Coffee and cocoa
• Sugar cane
• Rice
• Palm oil

These products are heavily concentrated in tropical regions where El Niño frequently changes rainfall patterns. Because global inventories of some of these commodities are already tight, relatively small production shocks can push prices higher quickly.

Market analysts have already warned that soft commodities such as sugar, cocoa, and coffee are especially exposed to El Niño‑related supply disruptions, contributing to expectations of higher agricultural commodity prices in the coming months.

A Second Shock: Energy and Fertilizer Costs

Climate risks are colliding with another pressure point in global agriculture: rising input costs.

Disruptions linked to tensions in the Middle East and the closure of the Strait of Hormuz have constrained fuel and fertilizer shipments through one of the world’s most critical trade corridors, tightening supplies and raising costs for farmers.

The World Bank reports that fertilizer prices surged early in 2026—with urea prices rising roughly 46% between February and March—a spike that will affect planting decisions and crop yields in upcoming seasons.

Higher fertilizer and energy prices influence food markets in several ways:

• Farmers may reduce fertilizer use, lowering yields.
• Producers may shift to less input‑intensive crops.
• Transport and processing costs rise across the food supply chain.

When these cost pressures coincide with weather disruptions, the effects can amplify each other.

How the Shock Could Reach Consumers

Food inflation rarely jumps overnight. Instead, the process tends to unfold in stages:

1. Climate forecasts raise uncertainty in agricultural futures markets.
2. Weather anomalies reduce crop prospects in key exporting regions.
3. Higher fertilizer and fuel costs increase production expenses.
4. Import‑dependent countries face higher landed food costs.
5. Retail food prices rise over the following months.

The World Bank notes that while global staple prices were broadly stable in early 2026, forward‑looking indicators are already pointing to rising inflation pressures as energy and fertilizer disruptions ripple through food supply chains.

Regions Most at Risk

The impact of food inflation depends heavily on local economic conditions. Regions where food already consumes a large share of household spending are especially vulnerable.

Latin America and the Caribbean illustrate the challenge. Recent UN reporting shows hunger levels in the region have improved in recent years, with undernourishment falling to about 5.1% of the population in 2024.

Yet food affordability remains a major concern. The World Food Programme estimates around 183 million people in the region cannot afford a healthy diet, highlighting the fragility of progress.

Even moderate increases in commodity prices can therefore translate into significant welfare impacts for lower‑income households.

The Big Uncertainty: How Strong the Event Becomes

Although El Niño now appears likely, the strength and geographic pattern of the event remain uncertain. NOAA forecasts show no single intensity category dominating the probability outlook yet.

That uncertainty matters because food‑price outcomes depend on three key factors:

• The severity of drought or heat in major producing regions
• The duration of fertilizer and energy supply disruptions
• Government responses such as subsidies, export restrictions, or grain stock releases

If weather disruptions remain moderate and fertilizer supplies normalize, the impact on global food prices could be limited. But if strong El Niño conditions coincide with sustained input shortages, the result could be a broader wave of food inflation into 2027.

The Bottom Line

A likely 2026–27 El Niño arrives at a sensitive moment for global agriculture. Climate risk, energy disruptions, and tight commodity supplies are converging at the same time.

Individually, each factor can move food markets. Together, they raise the probability that global consumers may soon face another round of higher prices for everyday staples—from coffee and chocolate to sugar‑based foods and cooking oils.

Whether the shock remains manageable or escalates into a larger food‑inflation cycle will depend largely on how severe the coming climate pattern becomes—and how resilient global supply chains prove to be.