The El Niño currently underway has the potential to become the “super” variety, with major adverse consequences for food production around the world and especially in Asia. Before we provide an update, here’s a brief description of the El Niño and La Niña weather phenomena from the article linked HERE:
“Normally, Pacific trade winds blow west across the equator, carrying warm South American water toward Asia. Cold water then “upwells” from the depths to replace the warmer surface water that’s been pushed away.
El Niño is a natural climate cycle that disrupts this pattern. It’s triggered by weaker-than-usual trade winds — winds that end up allowing much of that warm water to flow back toward the west coast of the Americas.
Ultimately, that warmer water forces the Pacific jet stream — a high-altitude air current that acts as a 7,000-mile “conveyor belt” pushing storms east across the Pacific toward North America — to move south of its usual path, altering weather patterns across the U.S. and the globe.
La Niña is the exact opposite: stronger trade winds, colder water and a Pacific jet stream that moves north rather than south.
El Niño and La Niña happen roughly every two to seven years and last nine to 12 months. El Niño generally arises more frequently than La Niña.”
This year’s El Niño stands a good chance of becoming strong enough to qualify as “super”, meaning that surface temperatures in the Pacific are on track to become much warmer than would be the case in an average El Niño. Super El Niños are relatively rare, typically occurring every 10-20 years.
However, as discussed in our 10th June commentary, a Super El Niño combined with other natural climate cycles could result in weather conditions during 2026-2027 being similar to those of 1877-1878, when Asia experienced the worst drought in centuries.
Evidence regarding the likely consequences of the 2026 El Niño will start to become available by August, because by that time it will be possible to make an initial assessment of India’s monsoon season. In particular, much less rainfall than usual in India during June-July (the first two months of the monsoon season) would increase the risk that an event of similar severity to 1877-1878 is in store.
The broad correction in the commodity markets that began in April could continue for a few more months, but as we mentioned last month, a “super El Niño” probably would result in grains and other crops being among the first commodities to resume their longer-term bullish trends. Therefore, over the months ahead, we will be looking for opportunities to add more agriculture-related exposure to the TSI Stocks List.
