Key facts
- A strengthening El Nino has formed, with ocean heat 2.5 degrees Celsius above normal.
- Forecasts suggest this El Nino could be among the strongest since 1950.
- Global wheat stocks are projected to reach a five-year high.
- World milled rice reserves are at an all-time high.
- India, a major rice exporter, is expected to maintain its export levels due to high domestic stocks.
- Current conditions in Indonesia and Malaysia remain suitable for palm oil growth.
A strengthening El Nino event has officially formed, raising concerns about potential global weather disruptions and their impact on food production. However, near-record global inventories of key agricultural commodities like wheat, rice, corn, and soybeans are expected to buffer the effects of any supply shocks. Meteorologists predict this El Nino could reach historically high levels, similar to events in 2015-16 and 1997-98 that caused significant agricultural disruption. Despite these historical precedents, consecutive years of record harvests have bolstered global food stocks. Forecasts indicate global wheat stocks will reach their highest in five years, while world milled rice reserves are at an all-time high. India, a major rice exporter, is unlikely to impose export curbs due to its substantial reserves. Global corn inventories are projected to hit a three-year high, and soybean stockpiles are expected to be near last year's record. While Australia, Southeast Asia, and India face the most significant weather threats, other regions are expected to experience less severe impacts. The current conditions in Indonesia and Malaysia remain suitable for palm oil growth, with newer, more drought-resistant palm varieties also contributing to resilience.