El Niño Forecast Sparks Commodity Price Surge Predictions

A potentially record-shattering super El Niño is approaching, threatening global commodity markets with severe supply shortages. Barclays' sustainable investment research analyst Craig Rye warned that the tropical Pacific El Niño index could peak between late 2026 and early 2027 at approximately 3.2°C, roughly 15% stronger than the 2015-2016 super El Niño event.

The analyst expects palm oil, coconut oil, and rubber to potentially rise 30% to 40% over the next 18 months, while robusta coffee could gain 20% to 30%, and rice prices may climb 10% to 20%. These commodities are highly vulnerable to drought and rainfall anomalies in Southeast Asia.

Disruptions will further transmit to industrial commodities, with aluminum and copper projected to gain as much as 20% over the next 18 months. Thermal coal could surge 20% to 40%, driven by structural shifts in electricity demand and reduced hydropower generation.