A potentially record‑setting El Niño could drive global food prices upward, rivaling the impact of the Iran conflict, prompting major investment banks to urge investors to watch for “climate black swan” events—abrupt, unforeseen climate shifts capable of destabilizing markets.
The alert follows concerns that a super El Niño may disrupt the worldwide rice market, leading large Asian importers to build up grain reserves in case of shortages. HSBC warned in a Monday report that this dynamic could set the stage for another food‑price spike.
“Geopolitical and weather risks are converging in Asia’s rice market,” wrote HSBC economists Ines Lam and Frederic Neumann.
The U.S. National Oceanic and Atmospheric Administration estimates an 81 % chance of a “very strong” El Niño forming between October and December, a phenomenon that could become one of the strongest since records started in 1950.
It also projects a 97 % likelihood that El Niño conditions will continue through early spring 2027.
El Niño usually brings below‑average rainfall to parts of South and Southeast Asia. Government data show India’s cumulative southwest monsoon rainfall was already over 20 % below its long‑term average by July 15. In May, the Philippines cautioned that a severe El Niño could cut rice output by roughly 700,000 tonnes.
Importers are taking steps to lock in supplies ahead of any shortfall. Malaysia has lengthened its rice‑reserve goal from three to nine months and aims to raise stockpiles to 300,000 tonnes, up from 200,000 tonnes, a government minister said in April, as reported by Bernama.
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