NOAA: 90% Probability of El Nino in 2026, Could Surge Agricultural Commodity Prices

According to NOAA estimates, there is a 90% probability that El Nino will occur this year, with a 25% chance of an extremely strong episode. The phenomenon is expected to disrupt global agricultural production and push commodity prices significantly higher, potentially undermining investment portfolios that have anticipated inflation relief following the Iran conflict.

Marex analysts note that strong El Nino events historically drive global food commodity prices up by as much as 9%, with wheat, rice, cotton, sugar, cocoa, and palm oil production at highest risk. Wheat and rice prices surged substantially during previous El Nino episodes in the Australia and Russia-Ukraine-Kazakhstan regions.