El Niño conditions have emerged in the Pacific Ocean and are expected to strengthen through 2026. Weather agencies including NOAA and the World Meteorological Organization (WMO) say there is a high chance the event will become moderate to strong, increasing the risk of extreme weather around the world.
Some forecasts suggest there is around a 63% chance of a very strong El Niño by 2027. Such an event could push temperatures higher, increase electricity demand, reduce crop yields and add fresh inflation pressures at a time when global supply chains are still recovering from recent disruptions.
For India, El Niño is a major concern because it often weakens the southwest monsoon. Lower and uneven rainfall can hurt the kharif cropping season, particularly crops such as pulses, oilseeds and cotton that depend heavily on timely rains.
Union Minister Piyush Goyal said the Centre and state governments are closely monitoring the situation and are prepared to take all necessary steps if water shortages or other weather-related challenges emerge. He stressed that protecting farmers remains a top priority.
Recent data already shows signs of stress in the farm sector. Research from ICICI Bank noted that strengthening El Niño conditions and a delayed monsoon have slowed sowing activity for several crops, especially pulses and oilseeds, although rice acreage has increased significantly from a year ago.
Historically, many El Niño years have been associated with below-normal monsoon rainfall in India. However, newer studies show that while total rainfall may decline, some regions can still experience extremely heavy downpours, increasing the risk of floods even during a weaker monsoon season.
Beyond India, El Niño could affect global growth, inflation and commodity markets. UBS expects it to support soybean production in countries such as the United States and Brazil, while Indonesia could see economic growth slow as drought affects agriculture and mining. Markets are closely watching agriculture, energy, utilities and insurance sectors for potential impacts.
Goldman Sachs economists warn that food prices across Southeast Asia could rise in the coming months. Higher oil prices linked to the Middle East conflict are already increasing fuel-related inflation, while rising fertilizer costs may push up farming expenses. A possible El Niño event by the end of 2026 could further disrupt grain supplies and raise food prices. Goldman estimates that a 10% increase in local oil prices would add about 0.3 percentage point to Southeast Asia’s food inflation over the following 12 months.
