FACTBOX: Rising El Nino warnings threaten crop outlooks in Asia and Australia

A looming El Nino weather pattern threatens to tighten farm yields in 2026, due to significantly lower rainfall in Asia and Australia, according to warnings and reports issued by international weather forecasting agencies and farmer groups in April.

Wilfran Moufouma Okia, chief of climate prediction at the World Meteorological Organization, said April 24 that forecasts indicate a "nearly global dominance of above-normal land surface temperatures" in the upcoming three-month period.

Similar warnings have since been issued by weather bureaus and farmer groups in Australia, Japan, Indonesia India and the US.

El Nino periods are marked by warming ocean temperatures in the central and eastern Pacific Ocean and can last up to a year. They are often associated with drought conditions in Australia, Indonesia and parts of southern Asia, while some parts of southern South America and the southern US may see higher rainfall according to the WMO.

Trade Flows

• In Indonesia, the world's largest palm oil producer and supplier, crude palm oil output may fall 1 million-2 million metric tons in 2026 compared with the year before due to El Nino-linked dry weather, along with a 30% rise in fertilizer prices amid the conflict in the Middle East, head of the Indonesian Palm Oil Association or Gapki, Eddy Martono, said April 28.
• In Malaysia, Indonesia's closest competitor in palm oil exports, the Malaysian Palm Oil Council, or MPOC, said April 24 that vegetable oil prices are expected to remain above MR4,500/mt ($1,135.65/mt) in the near term, as stronger biodiesel mandates, elevated crude oil prices and a potential El Nino development pressure supplies.
• In Australia, the world's largest exporter of beef, farmers are selling cattle in record numbers to prepare for a dry outlook, according to the country's public news service, ABC News. Expectations of severe dryness are driving cattle sell-offs, as many farmers are putting in place drought management plans, ABC News reported April 15.
• The severe dryness in New South Wales and Queensland has already forced farmers to scale back wheat and canola planting, the US Department of Agriculture said in a report April 28. Forecasts of below-average rainfall in the coming months, combined with the increasing likelihood of an El Nino developing later in 2026, are weighing on production prospects, with wheat and barley production and exports forecast to decline, the USDA said.
• In India, the India Meteorological Department predicted below-normal rainfall for the June-September southwest monsoon, the first such forecast in three years, with most regions expected to experience a deficit. El Nino conditions are expected to develop after June, which historically suppresses monsoon rainfall in India, the Indian weather bureau said April 13.

Prices

• The Platts 90CL Beef FCA Australia price had fallen 5.8% during the month to $7,760/mt as of April 29.
• Platts assessed Australian Premium White wheat at $274/mt on April 30, up 3% since the start of the month.
• In Indonesia, Platts assessed crude palm oil FOB Indonesia at $1,217.50/mt on April 30, down 3.8% since the start of April. Meanwhile, the CPO CFR West Coast India price fell 3% over the month to $1,245/mt on April 30.
• In its monthly report on global food prices, the Food and Agriculture Organization said that its Food Price Index averaged 128.5 points in March, up 2.4% month over month, representing its highest level since December 2025, as all major commodity groups, including cereals, meat, dairy, vegetable oils and sugar, posted gains.

Infrastructure

• Indonesia produced 51.66 million mt of crude palm oil in 2025, up 7.3% from the year before, according to data from Gapki. Total exports rose 9.5% year over year to 32.34 million mt.
• Malaysia's palm oil exports fell 9.6% to 15.27 million mt in 2025, the Malaysian Palm Oil Board said.
• In Australia, the USDA expects wheat production and exports to decline due to below-average rainfall in the coming months, combined with the increasing likelihood of an El Nino developing later in 2026.
• Australia is the world's second-largest exporter of wheat, canola and beef.
• The USDA estimates that Australia's wheat production would fall 19% to 29 million mt in the marketing year 2026-27 (October-September), while exports could decline to 23.5 million mt, down 2.5 million mt from the previous year.
• Australia is poised for another year of historically high cattle production, trade body Meat & Livestock Australia said in March. Total slaughter projections are expected to reach 9.45 million head in 2026, the highest level since 1978.