Global agricultural commodity prices are expected to rise through 2026–27 due to El Niño and a below-normal Indian monsoon [1, 2].

These intersecting climate and political factors threaten to tighten the global supply of essential goods, potentially increasing costs for consumers and producers worldwide.

Carlos Mera, head of agri commodity market research at Rabobank, said the shifting landscape of agricultural markets during a segment hosted by Manisha Gupta [1]. Mera said that the combination of El Niño, a weak Indian monsoon, geopolitical tensions, and biofuel mandates is reshaping the pricing of commodities including sugar, edible oils, coffee, and cocoa [1].

Climate patterns have shifted rapidly. The world recently exited a weak La Niña phase that lasted through most of 2025 and early 2026 [3]. However, El Niño was officially declared underway on June 11, 2026 [2]. This shift is expected to influence weather patterns for the remainder of the year, directly impacting crop yields in key producing regions [2].

Beyond weather, structural demands are placing further pressure on markets. Biofuel mandates are diverting agricultural products away from food supplies to energy production [1]. When combined with geopolitical instability, these mandates limit the available surplus of edible oils, and sugar, making the market more sensitive to weather-related shocks [1].

Industry analysts are now focusing on the 2026–27 outlook to determine how these variables will interact [1]. The synergy of a failing monsoon in India—a critical producer of sugar and oils—and the broader effects of El Niño creates a high-risk environment for price volatility [1].

“El Niño was officially declared underway on June 11, 2026.”

The convergence of a declared El Niño event and a failing Indian monsoon creates a 'perfect storm' for agricultural inflation. Because biofuel mandates have already reduced the buffer of available food stocks, there is less resilience to absorb climate-driven crop failures, meaning small weather disruptions are more likely to trigger significant global price spikes in 2026 and 2027.