According to analysts, the occurrence of a "super" El Niño would create a global food price shock, compounding the inflation already caused by the war with Iran.
A "super" El Niño could cause a global food price shock lasting through 2028: so say analysts observing how the climate is threatening harvests around the world, fuelling inflation already worsened by the war with Iran.
El Niño originates when a warming of the surface temperature of the Pacific Ocean occurs (from half a degree up to 3–4 degrees), influencing weather and climate worldwide. This natural phenomenon has a long history of impacting harvests and the food supply network. More than a century ago, the most severe El Niño ever recorded triggered catastrophic droughts in China, southern Africa, Brazil, Egypt and India. In a situation already compounded by colonial rule, famines occurred that caused the deaths of millions of people, including more than 6 million in India between 1876 and 1878.
The El Niño events of 1981–82, 1996–97, 2015–16 and 2023–24 were among the most intense ever recorded, but the 2026–27 cycle could be even more severe – a "super" or "Godzilla" El Niño, as it is being called – raising the risk of droughts and floods that could strike the agri-food system. The National Oceanic and Atmospheric Administration has in fact stated that there is a 63 per cent probability that sea surface temperatures will exceed 2°C above the norm by the end of the year.
Typically, El Niño brings an increased risk of drought in southern Africa and in the northern regions of South America, as well as flooding in southern Brazil, Argentina, Paraguay and Uruguay. El Niño has already begun to affect harvests, causing a drier monsoon season in India, with some regions recording only 25 per cent of their usual rainfall and some areas of central India receiving just 50 per cent, which could impact the supply of wheat, rice and sugar cane.
The prospect of a new inflationary shock is worrying central banks, fuelling fears that interest rates could be kept at elevated levels. "El Niño puts 'climateflation' back on the agenda," analysts at Banca UniCredit wrote in a note. "Recent heatwaves in Europe remind us that the climate baseline is already shifting. El Niño could add an additional layer of pressure by the end of the year, amplifying the effects of global warming."
According to analysts at Goldman Sachs, the intensity of this El Niño could cause a 15.8 per cent rise in global food commodity prices. This would trigger a chain reaction. The impact will be felt globally, including among European consumers, where food prices in the eurozone are expected to rise by 1.3 per cent.
According to Risilience, a climate risk analytics firm, the probability of an extreme El Niño scenario remains high. This could lead to a 14.3 per cent reduction in global agricultural output, equivalent to a production loss of 342 billion dollars. Price shocks could reach 10–50 per cent for major commodities, while the most exposed crops – including rice, palm oil, sugar and coffee – could see increases of 50–100 per cent or more.
According to experts, the full effect of El Niño will materialise gradually (taking into account the different sowing, growing and harvesting cycles as well as the world's various agricultural zones) and the consequences could fully emerge only in the second half of 2028. Even minor disruptions to trade flows could trigger cost fluctuations. The impact on shelf prices will depend on mitigation strategies and national policies. Factors such as consumer demand and retail prices also play an important role.
A Reuters article reports how in Italy, extreme heat is threatening the Parmigiano Reggiano supply chain. Record temperatures are affecting the quantity and quality of milk production by cows. In the heat, the animals spend more time lying down, eat less and produce up to 10 per cent less milk. Furthermore, if it does not rain, the grass on which the cows feed does not grow. The installation of fans and misting systems in farms is driving up energy production costs. Energy requirements are also increasing in the warehouses where Parmigiano Reggiano wheels are stored. Should extreme events persist and intensify, this will lead to a rise in costs.
Also in Italy, Confcooperative agroalimentare e pesca is sounding the alarm over the Po Delta in the provinces of Rovigo and Ferrara, where the heat is decimating molluscs. The rise in water temperature, which has reached 32 degrees Celsius, reduces oxygen concentration in coastal and lagoon areas. In the Sacca di Scardovari (Rovigo), the Consorzio Cooperative Pescatori del Polesine, in addition to the loss of mussels, is expressing concern for oysters, which are more resilient but still at risk. The situation is equally critical in the Sacca di Goro (Ferrara), where high temperatures and limited water exchange have turned the lagoon into a "giant cooking pot", with severe consequences for clams.
An algal bloom has also occurred at an intensity not seen in 10–15 years: operators are being forced to remove algae in order to continue working. Moreover, blue crab barriers are further restricting water circulation within the lagoon areas. According to estimates, climate change causes direct damage to Italian professional fishing worth around 200 million euros a year, particularly to mollusc farming.
"This is not a situation that concerns only the Po Delta," explained Paolo Varrella, president of the Cooperativa Mitilicoltori Associati of La Spezia, speaking on the 71% podcast. "The heat is hitting mollusc farming in open sea too, from Liguria to Puglia and Sardinia. Oxygen levels in the water drop, and this affects mussels and clams in particular, but oysters as well. Adaptation strategies are needed."
Climate is not the only force pushing food prices higher. A FAO report highlights how, in recent years, global beverage prices have risen far more rapidly than agricultural commodity prices. Global markets for coffee, cocoa and tea are under severe strain, held back by a structural fragility: more than 90 per cent of price fluctuations are caused by sudden imbalances between supply and demand, often amplified by financial speculation.
Production is concentrated in the hands of smallholder farmers in a handful of developing countries, while processing and consumption take place in wealthier nations. This deep geographical divide lengthens supply chains, increasing exposure to transport costs and logistical bottlenecks, with the result of amplifying global shocks on local markets and threatening farmers' incomes.
When prices rise, smallholder producers rarely benefit from such increases, remaining the most exposed to poverty and food insecurity. Conversely, the impact on retail prices for consumers is often cushioned by the fact that the raw commodity represents only a tiny fraction of the cost of the processed and packaged end product. According to the FAO, this vicious cycle must be broken by investing in resilient agricultural practices, improving transparency on harvest data to curb pre-emptive speculation, and fostering a more equitable redistribution of value throughout the entire supply chain.