El Niño Intensifies, Threatening Global Grain Markets

The World Meteorological Organization has confirmed that El Niño is intensifying and will continue to have a significant impact on global agricultural markets. Dr. Zhou Libin, Agricultural Research Manager at the London Stock Exchange Group, warns that the strengthening El Niño phenomenon in the second half of 2026 poses risks to grain and oilseed production in Southeast Asia, Southern Africa, Central America, and Australia.

The global supply chain for wheat is the most fragile due to climate-related production cuts and geopolitical disruptions. The European Union has experienced two consecutive years of severe droughts, leading to a decline in wheat and corn output. Persistent high-temperature and drought weather in the U.S. Great Plains has reduced winter wheat and corn production locally.

The Black Sea region's grain export routes have been restricted due to geopolitical tensions between Russia and Ukraine, forcing import-dependent countries to shift to other supply sources. The strong El Niño phenomenon has caused Australia's wheat production to fall significantly below the previous season's levels.