The 2026 Super El Niño Is Here: FAO, World Bank, and Financial Institutions Warn of Global Agriculture, Rice, and Inflation Shocks
A powerful El Niño is strengthening in the tropical Pacific with a 96% probability of persisting into February 2027, and a one in three chance of becoming a 'very strong' event, according to NOAA and the EU Joint Rese... The FAO and WFP have issued a joint anticipatory action appeal to protect nearly 9 million peopl...
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A powerful El Niño event is strengthening in the tropical Pacific and is now expected to persist into early 2027, triggering cascading warnings from the FAO, UN climate agencies, the World Bank, central banks, and major financial institutions about severe risks to global agriculture, rice supplies, and inflation. The Philippines and other emerging markets face the highest exposure.
How Strong Is This El Niño?
NOAA's Climate Prediction Center has confirmed El Niño conditions are in place. The probability of the event continuing is 82% for May–July 2026, rising to 96% for December 2026–February 2027 . There is now a one-in-three chance — 37% — of a "very strong" episode, defined as an index of at least 2.0°C . The EU Joint Research Centre has described this as a "potentially historic" El Niño, with climate impacts felt across 2026–27 in many regions, persisting even after the event peaks .
FAO and UN Agency Warnings: Protect 9 Million People
The Food and Agriculture Organization (FAO) published new analyses mapping where El Niño-linked drought is most likely to hit crops and pasturelands, pointing to a high probability of drought in Southeast Asia, Australia, the Pacific Islands, and parts of Africa . The FAO warned that El Niño could weaken India's summer monsoon and stress rain-fed crops during the crucial kharif season, with rice and maize at the center of the risk .
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A powerful El Niño is strengthening in the tropical Pacific with a 96% probability of persisting into February 2027, and a one in three chance of becoming a 'very strong' event, according to NOAA and the EU Joint Rese...
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A powerful El Niño is strengthening in the tropical Pacific with a 96% probability of persisting into February 2027, and a one in three chance of becoming a 'very strong' event, according to NOAA and the EU Joint Rese... The FAO and WFP have issued a joint anticipatory action appeal to protect nearly 9 million people across 22 countries, while the World Bank warns Philippine rice output could decline by 20–50% in some provinces.
What should I do next in practice?
HSBC, Fitch, and Saxo Bank flag El Niño as an overlooked inflation risk for emerging markets, with research cited by The Independent estimating a potential $342 billion hit to global agricultural output.
In a joint anticipatory action appeal covering June 2026 to March 2027, the FAO and the World Food Programme (WFP) sought to protect nearly 9 million people across 22 countries from the potential impact of a strong El Niño . The UN news service reported that FAO and WFP warned a "potentially strong" El Niño could "trigger another wave of climate-related disruption" .
Climate and Weather Agency Warnings
The World Meteorological Organization (WMO) warned that El Niño is likely to develop in the second half of 2026, raising concern over India's monsoon with forecasts of below-normal rain . The World Economic Forum (WEF) warned that the emerging El Niño poses a "systemic shock to global markets," flagging potential disruptions to agricultural trade flows .
Regions at Highest Risk
According to the FAO's analysis of 41 years of satellite imagery from its Agricultural Stress Index System (ASIS), the regions most vulnerable to drought impacts include the Sahel, Southern Africa, South and Southeast Asia, and Central America's Dry Corridor and the Caribbean, where some croplands and grazing areas face more than a 50% chance of drought . The EU Joint Research Centre identified increased drought risk in large parts of Australia, South-East Asia, and Africa .
Financial Institution Warnings: An Overlooked Inflation Risk
HSBC: "Another inflation risk now deserves closer attention: El Niño"
HSBC highlighted that food prices have been increasing since the start of 2026, and rising odds of a strong El Niño, plus elevated energy and shipping costs, imply upside risks to headline inflation in emerging markets .
Fitch Ratings: Prolonged Risk for the Philippines
Fitch Ratings warned that the Philippines could face "renewed economic disruptions" from a prolonged El Niño expected to last until at least early 2027, posing risks to growth and price stability .
World Bank: Rice Output Could Decline by 20–50%
The World Bank warned that 15 provinces in the Philippines are at risk of severe El Niño-induced drought, threatening national paddy output, with rice output potentially declining by 20–50% .
Other Key Warnings
S&P Global: Philippine rice output is expected to fall in marketing year 2025–26 as farmers grapple with elevated fuel and fertilizer prices compounded by El Niño .
Saxo Bank: Agriculture remains the sector most exposed, with weather risks building across several regions, most notably in Asia. Risks could surpass previous record events .
Metrobank Wealth Insights: The "very strong" El Niño risk has risen to one-in-three, potentially stoking consumer price gains and impacting investments in the Philippines .
Bloomberg Modeling: Emerging markets are more exposed to the inflationary impact of El Niño, with Argentina and Brazil potentially seeing inflation accelerate by an additional 0.75 percentage points .
The Philippines: The Ground Zero Exposure
The Philippines is consistently ranked among the most exposed countries to El Niño's food security shocks. Moody's Investors Service scored the Philippines a four out of five in its physical climate risk index, alongside Indonesia and India .
Rice Production Decline
USDA FAS Manila forecasts milled rice production to decrease by 3% to 11.95 million metric tons in MY 2024/2025 . S&P Global reports Philippine milled rice production is expected to fall in 2025–26 to 12.2 million metric tons, the lowest since MY 2019–20 .
The World Bank warns rice output could decline by 20–50% in affected provinces . The Inquirer reports palay (unhusked rice) output could fall to 17–18 MMT, erasing recent gains .
Rising Import Dependence
Imports could rise to 5.5–6.0 MMT, deepening import dependence and exposing the country to volatile global markets. Vietnam, which supplies 80–90% of Philippine rice imports, may also be affected by the Super El Niño, making sourcing 5 million tons from Vietnam alone potentially challenging .
Converging Shocks: Debt, Peso, and War
The Philippines faces a convergence of interacting systemic pressures: rising national debt, peso depreciation, and climate-induced agricultural losses. Scientists warned that with fertilizer supplies down due to the Iran war, El Niño on top of that "could sharply reduce agricultural output in less developed countries" . The combination of El Niño and geopolitical disruption to fertilizer supply creates an independent, compounding shock that should not be conflated as a single risk .
Risks for Other Emerging Markets
India
El Niño threatens to weaken the summer monsoon, stressing rain-fed rice and maize crops during the kharif season . Below-normal rain, a positive Indian Ocean Dipole, and higher fertilizer costs increase pressure on farms and food prices . India and Egypt rank among the economies most susceptible to the effects of El Niño according to a Standard Chartered Bank index .
Southern Africa
The 2025/26 season is concluding, but upcoming El Niño conditions threaten the next summer crop season . Persistent conflict in Sudan and South Sudan, combined with potential future El Niño risks, is driving a severe livelihood crisis and raising the risk of famine in the region .
Global Economic Damage
Research cited by The Independent estimates a "super" El Niño could see global agricultural output take a $342 billion hit, posing a critical threat to 500 million smallholder farmers worldwide. Scenarios include surges in the price of staple crops of 50% to 100%, with possible export bans of rice from India, Vietnam, and Thailand .
Latin America and the Caribbean
50% of Latin America's energy comes from hydroelectric sources, making the region highly exposed to El Niño; droughts force reliance on costlier thermal plants, raising agricultural production costs . In the Dry Corridor of Central America, El Niño is associated with dry conditions between June and December, potentially affecting maize and bean crops .
Caveats and Counterpoints
Some analysts note that ample global rice inventories may soften the supply shock. FAO economist Shirley Mustafa told the Economic Times that world inventories are likely to cushion some of the El Niño impact, calling it "a bit of silver lining" . However, this is a partial offset, not a guarantee, particularly if export bans are imposed.
The Iran war's disruption to fertilizer supply is an independent shock that compounds El Niño's direct weather effects — the two should not be conflated as the same risk. The combination, however, creates an unusually dangerous scenario for global food security that is distinct from previous El Niño events .
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