Super El Niño and prices: JPMorgan economists see global food inflation at 5% in 2027
In short
Chinese outlets Huxiu, TMTPost and Jiemian published a discussion on 9 October about whether a super El Niño will raise the prices of everyday goods. JPMorgan economists expect global food inflation to rise to 5% in the first half of 2027 from 2.8%, which the articles link to the Strait of Hormuz blockade, the Black Sea conflict and the El Niño. Commodity futures trader Zhang Siqi (张思齐) said El Niño does not simply push up all commodity prices.
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Chinese outlets Huxiu, TMTPost and Jiemian published on 9 October a discussion of whether a super El Niño will push up the prices of everyday goods. TMTPost and Jiemian ran it as an episode of the Silicon Valley 101 (硅谷101) podcast, in which host Mahua (麻花) spoke with Zhang Siqi (张思齐), described as a senior commodity futures trader. [ 1 , 2 , 3 ]
According to the articles, JPMorgan economists expect global food inflation to rise to 5% in the first half of 2027, from 2.8%. The articles attribute this to the blockade of the Strait of Hormuz, the conflict in the Black Sea and, in part, the super El Niño, which TMTPost and Jiemian describe as rare in 50 years. They say several meteorological agencies around the world issued warnings this summer and that the event is likely to last until next February. [ 1 , 2 , 3 ]
The host said El Niño is declared when surface sea temperatures in a set area of the eastern and central equatorial Pacific stay 0.5 degrees above normal for three months, with more than 2 degrees counting as strong, and that the monitoring index exceeded 2.5 in September. By NOAA's ONI standard, super El Niño events since 1950 occurred in 1972-1973, 1982-1983, 1997 and 2016, the host said. The articles say El Niño brings floods in the east and drought in the west of the Pacific; for China, it tends toward floods in the south and drought in the north, with areas south of the Yangtze most affected. [ 1 , 2 , 3 ]
The host cited a Goldman Sachs report of 7 September saying the Bloomberg agriculture spot index had risen 24% year on year, led by wheat at 41%, with soybean oil, corn, cotton and sugar also rising and palm oil and rubber futures climbing. [ 2 , 3 ]
Zhang said El Niño "is not a button that makes all commodities rise in price". It changes rainfall, temperature, ocean conditions and water resources, and only feeds into prices when it hits a crop's key growth period while inventories are low, exporters are concentrated, logistics are disrupted or policy is tightened, he said. When stocks are ample, other regions can make up a shortfall; when stocks are low and exports concentrated, even a one or two percent drop in global output can push up the risk premium, he said. [ 1 , 2 , 3 ]
Huxiu's summary says El Niño significantly affects palm oil and rice in Southeast Asia, sugarcane and rice in South Asia, wheat and rapeseed in eastern Australia, and soybeans and corn in South America. It says drought reduces palm oil output in Indonesia and Malaysia, that nitrogen fertiliser prices have risen as Hormuz tensions tighten natural gas supply, and that drought has cut daily Panama Canal transits, a temporary shock. Copper output is driven mainly by a 40% decline in ore grades since 1991 rather than El Niño, according to the summary. [ 1 ]
Why it matters
The articles say the weather anomaly could hit key growth periods of some crops and pass through supply chains to commodity and consumer prices, and ultimately to household spending. Business and tech outlets carried the same discussion, with a focus on how weather, inventories, policy and logistics interact before prices move.
Key facts
- JPMorgan economists expect global food inflation to rise to 5% in the first half of 2027, from 2.8%. [ 1 , 2 , 3 ]
- The articles attribute the expected rise to the Strait of Hormuz blockade, the Black Sea conflict and the super El Niño. [ 1 , 2 , 3 ]
- The El Niño monitoring index in the eastern and central equatorial Pacific exceeded 2.5, the level of a super El Niño. [ 1 , 2 , 3 ]
- El Niño brings a pattern of floods in the east and drought in the west of the Pacific; for China it tends toward floods in the south and drought in the north, with areas south of the Yangtze most affected. [ 1 , 2 , 3 ]
- Zhang Siqi said El Niño is not a button that makes all commodities rise in price. [ 2 , 3 ]
- A Goldman Sachs report on 7 September said the Bloomberg agriculture spot index was up 24% year on year, with wheat up 41%, according to the podcast host. [ 2 , 3 ]
- By NOAA's ONI standard, super El Niño events since 1950 occurred in 1972-1973, 1982-1983, 1997 and 2016, the host said. [ 2 , 3 ]
Confirmed by several sources
- JPMorgan economists forecast global food inflation of 5% in the first half of 2027, up from 2.8%. [ 1 , 2 , 3 ]
- The El Niño monitoring index exceeded 2.5, placing the event in the super El Niño category. [ 1 , 2 , 3 ]
- Zhang Siqi, a senior commodity futures trader, said El Niño affects prices through changes in rainfall, temperature and ocean conditions combined with production regions, crop calendars and supply chains, rather than raising all commodity prices. [ 1 , 2 , 3 ]
Still unclear
- When the super El Niño began and when it is expected to end. Huxiu's text says it began in summer 2023 and is expected to last until February 2024, while TMTPost and Jiemian say it began this summer and is likely to last until next February.
- Effects on palm oil, rubber, fertiliser, the Panama Canal and copper. These details appear only in Huxiu's summary; the TMTPost and Jiemian texts available are cut off before them.
- How much weather contributes to commodity prices. Zhang said there is no fixed percentage for weather's share of price movements.
- The Goldman Sachs report of 7 September put the year-on-year rise in the Bloomberg agriculture spot index at 24%, with wheat up 41%. Reported by a single source so far