Why a super El Niño event poses fresh risks to food costs
A batch of exported urea fertilizer is concentrated at the port for shipment to Yantai Port in Shandong Province, China, on March 26, 2026.
Cphoto | Future Publishing | Getty Images
An unusually strong El Niño later this year could further raise food security fears as disruption caused by the Iran war complicates supplies of key fertilizer products.
climate scientists to warn A planet-warming El Niño is increasingly likely to occur It will be shaped in the coming months with the participation of US meteorologists. don’t guess There is a one in three chance of a “strong” weather event occurring from October to December.
European climate models to indicate The possibility of a very strong or “super El Niño” is even higher, but the so-called spring barrier means these predictions may be inaccurate.
El Niño – or “little boy” in Spanish – is generally considered a warming of sea surface temperatures that occurs naturally every few years. Such an event is declared when sea temperatures in the tropical eastern Pacific rise 0.5 degrees Celsius above the long-term average.
Super El Niño, which has no official scientific category, is understood to refer to an exceptionally strong phase of the El Niño Southern Oscillation (ENSO) in which sea surface temperatures in the eastern Pacific rise by at least 2 degrees Celsius above normal.
Chris Jaccarini, senior analyst for food and agriculture at the Energy and Climate Intelligence Unit, said 2026 was shaping up to be another year in which conflict and climate risks become a costly reality.
“Food prices are under pressure from both sides: extreme climate conditions that are disrupting production in major growing regions, and a food system that is still dependent on fossil fuels and therefore subject to steep increases in gas, fertilizer, transportation and packaging costs,” Jaccarini told CNBC via email.
“Therefore, the possibility of a strong El Niño is significant,” he continued. “In a climate already destabilized by human emissions, it could increase weather risks, further fueling inflation driven by high fossil fuel prices.”
2026 could produce a super El Niño weather pattern. In this case, drought and limited water supply may be more important than nitrogen scarcity.
Paul Donovan
chief economist at UBS
Jaccarini said some commodities are particularly exposed to weather events, with El Niño generally putting upward pressure on cocoa, food oils, rice and sugar. He also cited broader risks for other products associated with the tropics, such as bananas, tea, coffee, chocolate and soy-fed meat.
Expectations for the return of El Niño are as follows: multi-year La Niña eventIt generally has the effect of lowering global temperatures compared to normal years.
‘Super El Niño’
Oil and gas prices and fertilizer costs increased It escalated rapidly as the Iranian war severely disrupted supplies in the strategically vital Strait of Hormuz, a narrow waterway connecting the Persian Gulf and the Gulf of Oman.
Roughly a third of the world’s seaborne fertilizer trade usually passes through the Strait of Hormuz, although shipping traffic has come to a near halt since the United States and Israel launched airstrikes on Iran on February 28.
World leaders welcomed Wednesday’s announcement of a temporary US-Iran ceasefire, but experts told CNBC that the deal does not offer a clear path to peace and the disruption caused by weeks of strikes will have a lasting impact.
The increases in fuel and fertilizer prices come as the U.S. planting season begins in earnest, raising fears among U.S. farmers about rising food prices and lower crop yields.
A general view of the Hong Kong skyline in fog on March 29, 2026 in Hong Kong, China.
Sawayasu Tsuji | Getty Images News | Getty Images
Given that fertilizer production is energy-intensive and natural gas is used in the production of some chemicals, any increase in energy prices inevitably raises fears of higher food prices, according to Paul Donovan, chief economist at Swiss bank UBS.
“However, higher fertilizer prices may not be the biggest agricultural price threat this year, as 2026 could produce a super El Niño weather pattern,” Donovan said in a note published in late March.
“In this case, drought and limited water supply may be more important than nitrogen scarcity,” he added.
Significant risks
Analysis It was published The United Nations World Food Program (WFP) warned last month that the number of people experiencing food insecurity around the world could reach levels seen at the beginning of Russia’s full-scale invasion of Ukraine in early 2022.
WFP estimates that if the Iran war continues beyond June and oil prices remain above $100 per barrel, the number of people facing acute hunger could increase by 45 million. This estimate will increase the number of 318 million people around the world who are already experiencing food insecurity.
Dawid Heyl, Ninety One’s joint portfolio manager of global natural resources strategy, said the El Niño event poses a risk to global food production, but the extent of that risk depends on when the climate phenomenon develops, how extreme it is and how long it lasts.
“I’ve been saying this to a lot of my colleagues and anyone who would listen, but I wasn’t really worried about Russia-Ukraine in terms of food inflation,” Heyl told CNBC via video call.
“I’m more worried [the Iran war] This time nitrogen is due to the impact on fertilizer production and availability,” Heyl said.
When asked about the possibility of a strong El Niño event following the spreading Middle East crisis, Heyl said: “If two negative factors like that come together, then the going could be really tough.”
A tractor drips nitrogen fertilizer onto lettuce rows at Pisoni Farms near Gonzales, California, United States, on Wednesday, April 1, 2026.
Bloomberg | Bloomberg | Getty Images
Heyl said that countries such as India, Australia, Brazil and Argentina were shown as countries that could be significantly exposed to El Niño, albeit for different reasons.
Meanwhile the European Union in question It said the El Niño event that occurred earlier this month “poses a significant risk to the main agricultural season” by threatening northwestern Ethiopia, South Sudan and Sudan with dry conditions later this year.
food safety
According to Jaccarini of the Energy and Climate Intelligence Unit, the answer to deepening food security fears lies in acknowledging that risks to the global food system will not go away anytime soon.
“With traditional geopolitical partnerships under pressure, international cooperation is more important than ever. Reducing food price volatility depends on reaching net zero together,” Jaccarini said. he said.
“Climate finance, ranging from rich countries to producing countries with low climate preparedness, is helping farmers adapt to climate impacts and protect crops and livelihoods,” he added.
— CNBC’s Chloe Taylor contributed to this report.
