Super El Nino: Famine Follows War?

Rory Green, TS Lombard’s chief China economist, is the latest Wall Street strategist to warn of the mounting macro and food inflation risks that a super El Niño could release on certain regions of the world.

In a note titled “Super El Niño: Famine Follows War?” Green warns that war-related disruptions to energy and fertilizer markets, compounded by adverse weather conditions, could create a perfect storm for global food prices.

Green said, “In general, El Niño raises temperatures and significantly exacerbates both drought and heavy rainfall. For global macro, it is an inflationary shock via the food price channel – a shock that will likely be compounded by existing war-related high fertilizer costs.”

He said within his coverage, “India is the most exposed to both growth and inflation risks, supporting our underweight Indian assets. Brazil and Mexico, too, will receive an inflation impulse.”

In recent weeks, the Japanese Meteorological Agency became the first major weather body to formally declare the onset of a super El Niño in the tropical Pacific.

If that forecast is correct, adverse climatic disruption could persist for 2 or more years, raising the risk of drought, flooding, lower crop yields, and higher food prices across key agricultural regions.

Green noted that El Niño has typically been associated with “hotter and drier conditions in India, parts of South and Southeast Asia, and Central America. But at the same time, it brings higher rainfall to parts of southern South America, the United States and Central Asia.”

Chart 1: GDP impact of past El Niño

Chart 2: CPI impact of past El Niño

El Niño Impact Watch:

If it proves “strong” or “very strong”, the 2026 El Niño is likely to have a historically large impact on global food prices, given already elevated underlying inflation, existing supply-chain disruption and the current high cost of farm inputs. China, Korea and Taiwan are relatively well insulated from the shock. As are most DMs, with the exception of Australia, as the maps below and the charts above show. In our coverage, it is India and LatAm that are most exposed.

India Impact:

El Niño to hit prices, employment and potentially equities

India’s Met Department recently warned that El Niño conditions will strengthen during the crucial monsoon season that accounts for ~75% of the annual rainfall the country receives. The Met Department (IMD) has forecast rainfall in the June-September monsoon to be 90% of the long-period average (LPA); if that projection bears out, India will face its worst monsoon since 2015. That year, the IMD had initially predicted below normal rainfall of 93% of the LPA, but the actual rainfall recorded was 86%, leading to drought-like conditions across many parts of India. Even though it is early days yet in this year’s season with the rains just about setting in over south peninsular India, indications are that the monsoon is off to a weak start. Rainfall in the first 15 days of June has already been far below normal, as Chart 1 below shows, and the progress of the monsoon across the subcontinent has stalled.

READ MORE HERE