We focus on grains and food industry.
We focus on grains and food industry.
We focus on grains and food industry.
We focus on grains and food industry.
We focus on grains and food industry.
We focus on grains and food industry.
We focus on grains and food industry.
We focus on grains and food industry. current time
El Niño Puts Global Agricultural Markets on a Weather Watch
The return of El Niño is creating fresh uncertainty for agricultural markets, but its impact is unlikely to be uniform across crops. Rice appears to face the most immediate risk, while cocoa, palm oil, sugar, robusta coffee and Australian grains are also vulnerable to weather disruptions.
Rice remains particularly sensitive because global trade depends on relatively limited surplus supplies and production is concentrated in Asian countries exposed to El Niño conditions. However, India is in a stronger position than it was during the 2023-24 food-price surge. Its rice reserves are estimated to have risen from 30.1% of domestic consumption in 2023-24 to about 42.2% in 2026-27. Larger inventories could reduce the need for abrupt export curbs, which previously contributed significantly to higher global prices.
Food Companies Face Uneven Pressure
Corn and wheat have comparatively lower direct exposure to El Niño because major producing nations are generally outside the most vulnerable weather zones. Nevertheless, drought in Europe, disruptions around the Black Sea and weaker production prospects are already tightening supply conditions.
Rabobank has highlighted cocoa, palm oil, sugar, robusta coffee and Australian grains as markets particularly exposed to adverse weather. For food and beverage manufacturers, the biggest consequences are likely to come through changes in raw-material availability and prices, although the timing will differ from one commodity to another.
The UN-linked Agricultural Market Information System (AMIS) said weather conditions have so far been broadly supportive, but the next several weeks could prove decisive for final crop outcomes.
Corn and Wheat Under Watch
Corn remains in a critical phase across the Northern Hemisphere. Heat and dry conditions in parts of Europe, North America and the Black Sea region have already raised concerns. Although rainfall has improved conditions in some areas, prolonged heat can shorten the grain-filling period and ultimately reduce yields.
Wheat faces a more complicated outlook. Stronger production expectations from Canada, India and some smaller producers, along with good winter yields in Türkiye, have helped offset weaker results in parts of Europe. Australia, however, remains a significant risk, with dry conditions potentially reducing wheat, barley and canola output.
Sugar and Coffee Risks Emerging
Coffee markets face a longer-term weather concern. The bigger issue may not be the current crop but the flowering conditions that will determine the 2027-28 harvest. Sugar is also vulnerable to uneven rainfall, particularly in Australia, India and Southeast Asia, while Thailand could face additional pressure from a smaller harvested area.
Brazil could provide some relief through additional supplies later in the season.
The greatest vulnerability remains in import-dependent economies across Sub-Saharan Africa. Countries with limited food reserves and weak fiscal capacity have little room to absorb another major commodity-price shock.
