El Niño's Impact on Global Food Supply Chains Forecast for Q1 2027

JPMorgan's agricultural team expects El Niño to significantly impact global food supply chains from Q1 2027, with peak intensity forecasted around November. According to NOAA, there is a 90% probability of a very strong event through the Northern Hemisphere autumn and winter.

The weather shock will coincide with historically high diesel prices, fertilizer shortages, and disrupted trade flows, increasing production costs and complexity in several major crop regions. These regions include Southeast Asia, India, Brazil, and Argentina, where crops such as palm oil, coffee, cocoa, sugar, rice, cotton, oilseeds, soybeans, and corn are grown.

Agricultural prices have already begun responding to these changes, with the JPMCCI Agricultural Index reaching multiyear highs in August. Previous breakout levels may provide support for meaningful pullbacks in this index.