How El Niño will drive up the cost of foods you love

By Andrew Freedman, CNN

(CNN) — US consumers are likely to face steeper prices for their morning latte, thanks to the near-record strong super El Niño still strengthening in the Pacific Ocean. El Niño is expected to combine with preexisting supply chain pressures around the world to increase prices on tropical products such as coffee, chocolate and palm oil.

But the developing countries where those products are grown are likely to face the largest impacts, said Christopher Barrett, who teaches food and agricultural economics at Cornell University. This is because developing countries have less capacity to adapt to shortages of key agricultural products like fertilizer, poor harvests of maize and other staple crops, and less resilience to bounce back from extreme weather and climate events.

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This El Niño, which is forecast to peak this fall and winter, comes at an already challenging time for food prices, given supply chain pressures from geopolitical tensions in the Middle East and Black Sea.

“We’re not in normal times,” Barrett said. This makes the ongoing El Niño somewhat of a food supply wild card. Still, many experts expect El Niño to cause localized food supply crises, particularly in eastern and southern Africa, while global impacts remain more limited.

Trouble in the tropics

El Niño is a periodic climate cycle that features hotter-than-normal sea surface temperatures in the tropical Pacific Ocean. The effects of El Niño reverberate around the globe, bringing drought to some regions, such as Australia, and flooding to others, including eastern Africa, along with an increased prevalence of heat extremes worldwide.

Coffee and palm oil-producing countries are particularly exposed to El Niño’s impacts because of their geography.

Brazil and Vietnam are major coffee-growing regions, and both can see significant shifts in precipitation during an El Niño, as can other growing areas in Central America. In fact, El Niño is already driving flooding in Southeast Asia and drought in Central America, and it’s still at least three to four months away from its forecast peak.

Palm oil is mainly grown in parts of Asia and is used as an ingredient in a wide variety of foods and other products — including cosmetics and biofuels. Indonesia, a major palm oil producer, is experiencing an El Niño-related drought, as the region’s typically heavy precipitation has shifted elsewhere. Indonesia is also seeing significant wildfire outbreaks, with this fire season currently on track to rival the worst on record there, which occurred during a previous super El Niño in 2015 to 2016. These wildfires are hurting palm oil production, too.

Because it’s used in so many different products, a shortage of palm oil could lead to higher prices in areas well beyond the growing regions, including the US.

Food security experts do not anticipate food shortages within the US from El Niño, given the country’s ample agricultural production. But the cost of these particular food products may increase during the rest of 2026 and into 2027 and beyond.

El Niño makes a bad supply chain worse

Maximo Torero, chief economist at the UN Food and Agriculture Organization, said global food prices are already on a steady climb because of the combination of geopolitical tensions, trade barriers and now El Niño. The big question though is how much El Niño will further amplify food prices, with a large range of projected increases depending on its severity and on countries’ policy responses.

For example, the oil supply crisis tied to the Iran conflict is increasing the costs of gasoline and diesel fuel and limiting fertilizer supplies. Meanwhile, trade barriers put in place by the US and other nations are affecting the price of goods from many countries.

According to Barrett, trade can be thought of as a “release valve” when facing the effects of El Niño. Trade barriers could constrain countries’ abilities to absorb El Niño-related extreme weather events and lead to some food price increases, particularly at the national or regional level.

For example, Torero said El Niño has already resulted in cuts to food production forecasts. A drier-than-average monsoon season has reduced India’s rice harvest, and Australia’s important wheat crop is also projected to come in lower than usual for the year as conditions turn drier and hotter than average there. If India decides to limit rice exports due to concerns about domestic food insecurity, that will in turn increase global rice prices.

“My view right now is that we are moving slowly towards a food crisis that will be hitting us at the end of this year, beginning of next year. How deep it is will depend a lot on the additional factor of El Niño,” Torero said.

That analysis, he said, assumes that the conflicts over the Strait of Hormuz and the war between Russia and Ukraine will continue.

Nelson Villoria, an agricultural economist at Kansas State University, said there can be a time lag between an El Niño and its effects on food prices. “Tropical commodities such as palm oil, coconut oil, coffee and fishmeal, show the largest increases,” he said. With vegetable oils and coffee, prices can stay elevated for up to a year after an El Niño.

Villoria said that globally, cereal crops tend not to be sensitive to El Niño-related effects, because much of the industrialized world doesn’t see major extreme weather impacts on those crops. However, it’s a different story in parts of Africa.

“Maize in Southern and Eastern Africa are highly sensitive, and their prices may spike considerably, up to ~20%, with dire consequences for the people in those regions,” he said.

Eastern Africa can be susceptible to flooding during an El Niño, drowning cereal crops there, while southern Africa is drought-prone. These areas are relatively disconnected from world markets, making it harder to simply increase food imports to cover shortages.

“Food prices almost always go up a bit with El Niño events, and they go up more the more serious the El Niño and the worse the timing,” said Barrett of Cornell University. This one is likely to be the most intense El Niño on record, “crazy big,” and is hitting the global economy at a particularly bad time, he said.

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