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El Niño: the climate driver that doesn't always deliver

Recurring — 2009-10, 2015-16, 2023-24

The lesson: El Niño moves the weather, not always the price. In 2015–16 wheat fell sharply but tracked outcomes were mixed (rice +7.7%, soy +2.1%) while sugar spiked — fear the mechanism, measure the outcome.

What happened

Three El Niño episodes, dated from NOAA's Oceanic Niño Index tables: 2009-10 (moderate-strong, ONI peak 1.6 in late 2009), 2015-16 (very strong, ONI peak 2.5-2.6 — one of the three strongest on record), and 2023-24 (strong, ONI peak about 2.0). Each rewired rainfall the same way — dry Southeast Asia and Australia, wet southern South America, weak Indian monsoon — but landed on very different stock and supply situations.

Weather context
  • India (Gangetic plain centroid) (2015-16 El Nino): +1.36°C vs the 1991–2020 baseline; rainfall -41.1% vs baseline (297 days with <1mm rain). One of the three strongest El Ninos on record: marked heat and a large rainfall deficit here.
  • India (Gangetic plain centroid) (2023-24 El Nino): +0.19°C vs the 1991–2020 baseline; rainfall +10.5% vs baseline (320 days with <1mm rain). A strong El Nino by the Oceanic Nino Index, but near-normal weather here - the 'doesn't always deliver' case in numbers.
  • Australia (NSW wheat belt centroid) (2015-16 El Nino): +0.87°C vs the 1991–2020 baseline; rainfall +25.0% vs baseline (308 days with <1mm rain). Hot but wetter than normal in this window: El Nino does not dry every region uniformly.

One region centroid is illustrative, not field-level truth; baseline is the 1991–2020 day-of-year mean. Weather data provided by Open-Meteo.com.

What everyone expected

2015-16: Rabobank (Jun 2015) — Australian wheat 'typically declined by one quarter during El Niño years'; Schroders (Sep 2015) — 'big price spikes' in coffee, cocoa, palm oil, sugar and wheat during past El Niños; New Scientist — the S&P ag index gained an average 24.4% in the year after past El Niños. 2023-24: Reuters (May 2023) — robusta at a 15-year peak 'on worries about future production due to El Nino'; Straits Times (Dec 2023) — rice at 15-year highs, wheat, palm oil and rice supplies at risk. The contemporary contrarian: the World Bank (Oct 2015) — 'unlikely to cause a spike in global agricultural prices given ample supply.'

What the official numbers expected · USDA WASDE (as-published vintages)

What the official numbers said at the time (USDA WASDE vintages, as published): the first 2023/24 projections (May 2023) put world corn production at 1,220 Mt; by the near-final estimates (Oct 2024) it was 1,226 Mt - essentially unchanged. Soybeans did slip (411 to 395 Mt); wheat was flat (790 to 790 Mt). The 2023-24 El Nino, one of the strong ones, barely moved the world grain balance sheet. (USDA WASDE, world supply/use, 2023/24 marketing year, million metric tons; vintages released 12 May 2023 vs 11 Oct 2024.)

As reported at the time: Rabobank, Jun 2015 · Schroders via The Grocer, Sep 2015 · Reuters, May 2023 · Straits Times, Dec 2023

What actually happened

  • Wheat
    Jun 2015 → May 2016 · ZW=F month-end closes
    -24.4%

    The strongest El Niño in a generation — and wheat fell by roughly a quarter. Australian output held near 24 Mt (ABARES/USDA); global stocks did the rest.

  • Sugar
    Jun 2015 → May 2016 · SB=F month-end closes
    +42.4%

    The one commodity where the 2015-16 fear showed up: drought in India and Thailand.

  • Coffee
    Jun 2015 → May 2016 · KC=F month-end closes
    -7.0%

    Vietnam robusta drought was real — but arabica's reduced frost risk balanced it in price terms.

  • Soybeans
    Jun 2015 → May 2016 · ZS=F month-end closes
    +2.1%

    Favorable Argentine and Brazilian rains, as the mechanism predicts — flat to soft.

  • Palm oil
    Jun 2015 → May 2016 · World Bank Pink Sheet monthly prices
    +6.7%

    Drought concern was loud; the price move was small.

  • Rice
    Jun 2015 → May 2016 · ZR=F month-end closes
    +7.7%

    Asian drought trimmed output, but ample stocks kept the move modest.

  • Coffee
    May 2023 → May 2024 · KC=F month-end closes
    +24.5%

    2023-24: coffee rallied hard. Vietnam's robusta drought was real and priced in, though arabica's own 2024 Brazil drought also fed this window — the move isn't cleanly El Niño alone.

  • Rice
    May 2023 → May 2024 · ZR=F month-end closes
    +2.2%

    2023-24: rice touched 15-year highs in export hubs on Indian curbs plus El Niño — our futures window shows a small net move.

  • Palm oil
    May 2023 → May 2024 · World Bank Pink Sheet monthly prices
    -8.0%

    2023-24: Southeast Asian dryness feared, palm oil fell — supply held up.

  • Sugar
    May 2023 → May 2024 · SB=F month-end closes
    -27.0%

    2023-24: sugar fell by more than a quarter despite the drought narrative — Brazilian supply dominated.

  • Rice
    Jun 2009 → Apr 2010 · ZR=F month-end closes
    +1.1%

    2009-10: the feared episode that barely registered in world prices — India's pain was domestic food inflation, not global prices.

  • Wheat
    Jun 2009 → Apr 2010 · ZW=F month-end closes
    -3.8%

    2009-10: wheat drifted lower through the episode.

Episode strength doesn't map neatly to crop damage: 2015-16 was one of the three strongest on record, yet Australian wheat output held near 24 Mt (ABARES/USDA). El Niño can help as well as hurt — Argentine soy yields average higher in El Niño years. And global stocks at the episode's start decide whether a production miss becomes a price spike — the World Bank's October 2015 call rested on ample supply, and it was right.

The assessment

Three episodes, three different report cards. 2009-10: feared, but mostly a domestic Indian story — world prices barely moved. 2015-16: one of the three strongest El Niños on record, and wheat fell by roughly a quarter while the World Bank's 'ample supply' call proved right; only sugar spiked hard — the rest of the tracked outcomes were mixed (rice +7.7%, soy +2.1%, palm oil +6.7%, coffee -7.0%). 2023-24: coffee and rice felt it, palm oil and sugar did not. The pattern: El Niño is a real production mechanism, but price is set at the margin by stocks, substitutes, and who else is harvesting. An ING retrospective put it bluntly — across past El Niño episodes the FAO Food Price Index shows no clear pattern of rising prices; during several events it actually declined.

How this record has changed

Living document — every material change is logged here, newest first.

  1. New evidence2026-09-23

    California Governor Gavin Newsom proclaimed a statewide emergency on Sep 21, mobilizing state resources (flood-fighting supplies, Caltrans staging, National Guard on standby) ahead of potential flooding, landslides, and coastal hazards this winter as a very strong El Niño develops. California had already experienced coastal flooding earlier in 2026, per The Watchers.

    The Watchers, 22 Sep 2026

  2. New evidence2026-09-23

    On Sep 19, the Pacific's key El Niño monitoring region reached 3.05°C above average, breaking the prior record from November 2015 — with roughly three months of strengthening still to come before the typical peak. Single-day reading announced by Washington Post meteorologist Ben Noll on Sep 20 (not CPC's monthly/trimonthly index); directionally consistent with CPC's Sep 10 outlook of 75% odds of a historic-strength (Oct–Dec RONI ≥ +2.5°C) event.

    TheWeather.com, 22 Sep 2026 (citing Ben Noll / Washington Post, 20 Sep 2026)

  3. New evidence2026-09-21

    NOAA's Climate Prediction Center raised the probability of a historic-strength El Niño for October–December 2026 to 75% on Sep 10 (up from 69% in August), with a 98% chance of a very strong event (Oct–Dec RONI ≥ +2.0°C); 'historic' means RONI ≥ +2.5°C, exceeding any El Niño in CPC's record back to 1950. No commodity outcomes exist yet — this is forecast, not evidence: the record's three-episode sample is about to get a fourth.

    The Watchers, 11 Sep 2026 (citing CPC Sep 10 ENSO Diagnostic Discussion)

  4. New evidence2026-09-15

    Added two evidence lines: ERA5 weather reanalysis context for the event window (anomaly figures vs 1991-2020 baseline; weather data provided by Open-Meteo.com) and 'what the official numbers expected at the time' from USDA WASDE as-published vintages (expectations, not outcomes). Both from Morrowfly research vintage v1_2026-09-15; raw series stay in research.

    Morrowfly research vintage v1_2026-09-15 (ERA5 reanalysis via Open-Meteo; USDA WASDE as-published vintages)

  5. Correction2026-09-15

    An independent adversarial review rewrote the lesson to reflect mixed outcomes across tracked commodities (wheat fell, rice/soy/sugar did not), added row-level sources to every transmission entry, and qualified the 'no direct channel' cases. No new outcome data was added.

    Morrowfly internal adversarial review (15 Sep 2026)

Transmission

  • Palm oil
    production loss

    Southeast Asian drought cuts yields with a lag — the classic El Niño commodity channel.

  • Rice
    production loss

    Drought across Thailand, Vietnam, Indonesia, the Philippines and India.

  • Sugar
    production loss

    Weak monsoon in India and Thailand (drought); excess rain delaying Brazil's harvest.

  • Coffee
    production loss

    Drought and heat hit Vietnamese and Indonesian robusta; Brazil/Colombia arabica often benefits from warmer, frost-free conditions.

  • Wheat
    production loss

    Australian drought and heat — the most documented El Niño wheat channel.

  • Soybeans
    production loss

    Above-normal rain in Argentina and southern Brazil usually favors yields — El Niño is often bearish here.

  • Corn
    production loss

    Favorable rains in Argentina/southern Brazil; planting risk in India on a weak monsoon.

  • Cotton
    production loss

    Deficient Indian monsoon threatens the summer crop.

  • Rubber
    production loss

    Drier-than-normal conditions across Indonesia, Thailand, Vietnam and the Philippines.

  • Cocoa
    production loss

    Heat and drought pressure in Ivory Coast, Ghana, Cameroon and Nigeria.

  • Copper
    production loss

    Heavy rain and flooding on Peru's coast and in northern Chile disrupting mines.

  • Live cattle
    production loss

    Australian drought forces herd destocking — a near-term slaughter surge, tighter supply later.

  • Vanilla
    protective

    El Niño tends to suppress Southwest Indian Ocean cyclone activity — protective for Madagascar vanilla, since cyclones are the kill mechanism (ReliefWeb/OCHA, Feb 2024).

  • Platinum
    supply disruption

    El Niño-linked 2015–16 South African drought strained mine water supplies — a plausible supply channel, the weakest of the re-examined labels (MiningMx, Nov 2015).

Sources

Notes

  • Prices are month-end closes from our series unless noted; windows are labeled beside each number.
  • Secondary press quotes are reported as published and were not individually audited against primary sources.
  • Illustrative scenario record. Not a prediction. Not financial advice.