By Hannah Yemisi
The World Meteorological Organization (WMO), the United Nations weather agency, warned on Tuesday that a moderate to potentially strong El Niño is developing and could persist until November 2026, driving above-average global temperatures, droughts, floods, heatwaves and food supply disruptions. WMO Secretary-General Celeste Saulo said governments should prepare for a potentially severe event, while United Nations Secretary-General, António Guterres, linked the development to broader climate risks and the urgency of energy transition. The warning comes as global food markets remain sensitive to geopolitical disruptions and inflationary pressures.
Saulo said: “We need to prepare for a potentially strong El Niño event – which will exacerbate drought and heavy rainfall and increase the risk of heatwaves both on land and in the ocean.”
Guterres added: “The world must treat it as the urgent climate warning it is. El Niño conditions will pour fuel on the fire of a warming world.”
DECISION HIGHLIGHT
The United Nations system is escalating its climate-risk warning, urging governments, businesses and food producers to prepare for potential weather-related economic disruptions through late 2026.
DECISION MEMO
The significance of the warning extends beyond meteorology. El Niño functions as a transmission mechanism through which climate shocks become economic shocks. Droughts reduce agricultural output, floods disrupt logistics, heatwaves strain energy systems, and supply shortages feed into inflation.
The WMO’s caution reflects uncertainty over intensity but not direction. The probability of above-average temperatures is increasingly embedded in climate forecasts, raising the likelihood of pressure on food production, water availability and public health systems.
For commodity markets, the concern is particularly acute. Agricultural products exposed to weather variability, including cocoa, may experience supply volatility. Hein Schumacher, Chief Executive Officer of Barry Callebaut, warned that cocoa-growing regions in Ecuador and West Africa, which account for roughly 60 percent of global production, could face reduced output.
The broader implication is that climate risk is increasingly becoming an economic variable rather than a purely environmental one.
DATA BOX
- Expected duration: June-November 2026
- El Niño cycle typically lasts: 9-12 months
- Tropical Pacific subsurface temperatures: More than 6°C above average
- Previous strong El Niño: 2023-2024
- 2024: Hottest year on record
- Cocoa production at risk:
- Ecuador and West Africa
- Approximately 60% of global output
- Current London cocoa futures:
- £2,944 per metric tonne
- Down from over £9,000 in April 2024
- Key projected impacts:
- Heatwaves
- Droughts
- Heavy rainfall
- Hurricane risks
- Food supply disruption
- Water shortages
- Disease spread
WHO WINS / WHO LOSES
Winners: Renewable energy providers, climate-adaptation businesses, irrigation technology firms, weather analytics companies and disaster-resilience infrastructure providers.
Losers: Rain-dependent agriculture, food-importing economies, vulnerable communities, insurers facing climate-related claims and industries exposed to weather disruptions.
POLICY SIGNALS
- Climate adaptation is moving closer to economic policy planning.
- Food security risks may require stronger agricultural resilience measures.
- Governments may face pressure to expand disaster preparedness and water-management programmes.
- The United Nations continues to frame climate events as a strategic policy issue rather than an environmental concern alone.
INVESTOR SIGNAL
Investors should expect heightened attention to climate-sensitive commodities, agricultural supply chains, water infrastructure, renewable energy and adaptation technologies. Weather-related supply disruptions could reintroduce volatility into global food and commodity markets.
RISK RADAR
- Global food inflation acceleration
- Agricultural yield reductions
- Water scarcity pressures
- Supply-chain disruptions
- Climate-linked disease outbreaks
- Increased disaster-recovery costs
- Commodity price volatility
- Rising economic losses from extreme weather events
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