With the burden of higher gas prices from the Iran war already heavy, another headwind is rising from the Pacific. Forecasts are piling up that an El Niño will form in the Pacific this summer and could grow into a "super El Niño" by year-end, the strongest in more than 160 years since the 1870s.
El Niño is a natural climate phenomenon in which sea surface temperatures in the central Pacific rise above average, as widely known. It typically appears near the equator every two to seven years, and once it occurs, it lasts about a year before subsiding on its own. A super El Niño is not just about the ocean getting a bit warmer. To be called a super El Niño, sea temperatures in the key equatorial Pacific region must run at least 2 degrees Celsius above average. Historically, there have been only three such events: 1982–1983, 1997–1998, and 2015–2016.
According to the latest outlook released on the 6th (local time) by the European Centre for Medium-Range Weather Forecasts (ECMWF), sea temperatures in the core central equatorial Pacific are projected to run up to 3 degrees Celsius above average by the end of this year. At that level, it would approach—or surpass—the strongest El Niño events on record from 1877 and 2015. It would not just be a strong El Niño but one for the record books. The State University of New York said it "appears likely, with high confidence, to be the largest El Niño since the 1870s." The World Meteorological Organization (WMO) also said El Niño is likely to develop from midyear and disrupt global temperature and precipitation patterns. The National Oceanic and Atmospheric Administration (NOAA) put the probability of El Niño development between May and July this year at about 60% in last month's monthly outlook. Andrea Taschetto of the University of New South Wales said, "El Niño and La Niña are the most reliable signals for gauging weather a few seasons ahead," adding, "There are no better indicators for agriculture, disaster management, and insurance."
Scientists said there had been unusual signals since April indicating a potential record El Niño in the Pacific this year. An uncommon "triple cyclone" pattern near the equatorial Pacific generated record westerly winds. As these strong westerlies pushed a subsurface pool of warm water eastward, the subsurface temperature anomaly in the Pacific was observed at up to 7 degrees Celsius above average. The ocean warms and cools much more slowly than the atmosphere. Experts interpreted this to mean that it was not a brief surface warming, but that a considerable amount of heat energy to fuel El Niño had already built up beneath the surface.
El Niño itself is a natural cycle that has repeated for thousands of years. But each strong event simultaneously rattles heat waves, droughts, floods, and typhoons. Agricultural yields, maritime logistics, insurers' loss ratios, and commodity futures tend to react in turn as soon as El Niño develops. According to analysis by the International Monetary Fund (IMF), when a positive shock of one standard deviation hits the El Niño–La Niña cycle, the global real commodity price inflation rate rises by 3.5 to 4 percentage points. This shock accounts for about 20% of total commodity price variation. On top of inflation lifted by oil prices, higher food prices at the table are layered once more.
Experts projected that through November, India's central and northern regions—the world's largest rice exporter and a major sugar producer—are likely to see reduced monsoon rainfall and a higher chance of extreme heat. Parts of Australia, Indonesia, the Philippines, Central America, and northern South America face increased drought risk. Indonesia and Malaysia account for more than 80% of global palm oil supply. Vietnam and Brazil are the No. 1 and No. 2 producers of robusta and arabica coffee, respectively. West Africa's cocoa belt spanning Côte d'Ivoire and Ghana also falls within the drought impact zone triggered by El Niño. In contrast, heavy rain risk is expected to increase in Peru, Ecuador, and southern Brazil, injecting climate variables into fish catches and grain transport. In a report released on the 4th of this month (local time), Royal Bank of Canada (RBC) said, "This super El Niño could simultaneously disrupt production across major global breadbaskets such as rice, wheat, and soybeans," estimating that "the number of people exposed to an acute food crisis in 2026 will reach 363 million."
Historically, strong El Niño events have almost always come with record heat as the ocean releases stored heat into the atmosphere. Climate scientist Zeke Hausfather said in an interview with The New York Times (NYT) that "2026 is likely to be the second-hottest year on record." The hottest year on record is 2024. Hausfather added, "There is a 73% chance that 2027 will be recorded as the hottest year on record, overtaking 2024."
Global insurance broker Aon tallied worldwide economic losses from natural disasters in 2023 at $380 billion (about 533 trillion won), of which $118 billion (about 165 trillion won), or 31%, was covered by insurance. As El Niño strengthens, those figures are likely to swing again.