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What if this El Niño is the strongest since 1950?

An El Niño is underway right now: NOAA's Climate Prediction Center issued an El Niño Advisory on September 10, 2026, with a greater than 90% chance of a very strong event through fall and winter 2026–27. This scenario models the forecast's upper tail — the difference between very strong (≥2.0°C) and historic (≥2.5°C, stronger than any El Niño since 1950).

1The setup

An El Niño is underway right now: NOAA's Climate Prediction Center issued an El Niño Advisory on September 10, 2026, with a greater than 90% chance of a very strong event (≥2.0°C) through fall and winter 2026–27, and a 75% chance the October–December peak is historic — stronger than any El Niño since 1950 (CPC defines historic as ≥2.5°C for a 3-month RONI), up from 69% in August. Two very strong events set the measured range: 1997–98 (ONI peak 2.4°C) cut Indonesian palm output 7.1% and Malaysian output 5.5%, and 2015–16 (ONI peak 2.6°C) drove SE Asian yields from 3.62 to 3.26 t/ha while global availability fell for the first time in almost 20 years. Malaysia's economic minister said in June 2026 that the 2015–16 event cut Malaysian palm output by up to 18% — and warned this year's El Niño could cut crop yields 8–10%. The crop mechanism centers on palm oil: Indonesia and Malaysia ship 82.7% of world palm-oil exports (2024 vintage), and palm is ≈46% of global vegetable-oil exports, so SE Asian drought reprices the whole edible-oil complex — with yields lagging moisture deficits by 4–12 months.

Market check · Polymarket

What the market thinks

What will the peak RONI be for the 2026–27 El Niño?

Polymarket · live contract

below 1.5

0%

at least 1.5 but below 2.0

2%

at least 2.0 but below 2.25

4%

at least 2.25 but below 2.5

22%

2.5 or above

75%

The market's favorite outcome is “2.5 or above” at 75% — you say the real chance is…

Your take lives on this device only. Illustrative — not a bet, not advice.

Closest live contract — the peak RONI ladder for the 2026–27 El Niño, which prices exactly the scenario's upper tail: 2.5°C or above would be the strongest since 1950. It is not a contract on crop prices.

$48.4K traded · resolves by 2027-04-01Odds as of Sep 21, 2026View this market on Polymarket →

Illustrative only — not financial advice, not a recommendation.

2Right now

Palm oil

QUIET

Stress 3/10

  • Sandakan: week-ahead forecast shows dry rainfall
  • Sandakan: VPD dry
  • 3 stories point to tighter supply this week (3 of 5 headlines)

Monitor data as of Sep 24, 2026. Scores are observed readings, not forecasts.

How the shock travels

SE Asian palm yields (lagged 4–12 months)

Drought cuts fresh-fruit-bunch formation months before output falls: in 1997–98 (ONI peak 2.4°C) Indonesian palm output fell 7.1% and Malaysian output 5.5%, and in 2015–16 (ONI peak 2.6°C) SE Asian yields fell 3.62→3.26 t/ha while global availability fell for the first time in almost 20 years. Malaysia's economic minister said in June 2026 that the 2015–16 event cut Malaysian palm output by up to 18%.

Evidence: USDA data via Bloomberg/MPOB — 1997–98: Indonesia −7.1%, Malaysia −5.5%; Research and Markets via foodnavigator — 3.62→3.26 t/ha, 2015→2016; Reuters, Jun 11 2026 — Malaysia output cut up to 18% in 2015–16

Indonesian peat fires and haze

Prolonged dry seasons raise forest-fire risk, and haze disrupts photosynthesis — USDA's 1998 Jakarta post report attributed part of Malaysia's 1997/98 production decline (estimated −7%) to haze from Kalimantan and Sumatra fires, alongside drought.

Evidence: USDA FAS GAIN Jakarta palm-oil update, Oct 1998 — haze disrupted photosynthesis, Malaysia 1997/98 output −7%

Caveat: USDA Post assumed most losses were water stress — the haze share is not separately quantified

Vegetable-oil substitution cascade

Palm oil is ≈46% of global vegetable-oil exports, and Indonesia + Malaysia supply 88% of it — so a SE Asian shortfall reprices the whole edible-oil complex, including soy, sunflower, and rapeseed oils, through substitution demand.

Evidence: Marex via grainews, Jun 25 2026 — palm ≈46% of global veg-oil exports; Indonesia + Malaysia = 88% of it

Caveat: Structural inference from export concentration — no measured cross-oil price pass-through cited here

Rice export tightening (mechanism only)

The same drought that hits palm dries SE Asian rice belts, and governments can restrict exports to protect domestic supply — Thailand and Vietnam are the #2 and #3 rice exporters behind India.

Evidence: Structural mechanism — no measured El Niño-linked rice export restriction located in sources (UNVERIFIED as an outcome)

Caveat: UNVERIFIED as a measured El Niño outcome — mechanism only; exact rice-export shares also unverified

US Corn Belt upside (partial offset)

El Niño typically brings cooler, wetter Midwest summers that aid corn and soybean crop development — a partial offset to Southern Hemisphere losses, not a net global gain.

Evidence: USDA/Bloomberg reporting — El Niño's cooler, wetter Midwest aids crop development

3The exposure

  • Indonesia
    48.6%
  • Malaysia
    34.1%
  • Netherlands
    2.0%
  • Thailand
    1.9%
  • Papua New Guinea
    1.6%
Share of global export value (USD) — 2024 vintage. Amber = the scenario focus. Ranked by share.

How the shock travels

Follow the shock downstream — from the palm oil market, through processors, to the shelf. These are the usual stages, not this scenario's outcome: exposure at each step, never a prediction.

  1. Day 0: crude palm oil futures (Bursa Malaysia) spike

    timing not established

    Lag basis: lag not established in sources reviewed

    crude palm oilpalm kernel oil

  2. Refining and food/consumer-goods manufacturing

    timing not established

    Lag basis: lag not established in sources reviewed

    refined/bleached/deodorized palm oilmargarinechocolateinstant noodlessoap

    Unilever

    UL

    Unilever buys about 1 million tonnes of crude palm oil and derivatives plus ~0.5 million tonnes of palm kernel oil annually for margarine, ice cream, soap and shampoo

    Source: FoodNavigator-Latam, quoting Unilever's Foods & Refreshments sourcing chief

    Mondelez International

    MDLZ

    Mondelez purchases palm oil for snacks and chocolate (WWF palm oil scorecard: ~357,000 MT bought in 2024) and requires suppliers to meet its Palm Oil Action Plan

    Source: WWF Palm Oil Buyers Scorecard - Mondelez

  3. Grocery and household-products shelf

    timing not established

    Lag basis: lag not established in sources reviewed

    packaged snackschocolate barscoffee creamerlaundry detergentshampoo

    Nestlé

    NSRGY

    Nestlé sourced approximately 453,000 MT of palm oil and palm kernel oil in 2020 for products including chocolate and coffee creamers

    Source: Nestlé Palm Oil Responsible Sourcing 2020 Progress Report

Illustrative scenario. Not a prediction. Not financial advice. Company entries describe factual exposure to the commodity — not a view on any stock.

Trade map

Who ships it, who can’t do without it

2024 vintage · annual data, 1–2y lag

Sourced trade structure — the scenario’s shock geography at country resolution. Exposure, not a forecast.

Palm oil · Indonesia + Malaysia

Top exporters

  • Indonesiadominant

    48.6% of world exports

  • Malaysiadominant

    34.1% of world exports

  • Netherlands

    2% of world exports

  • Thailand

    1.9% of world exports

  • Papua New Guinea

    1.6% of world exports

Note: crude 151110 + other 151190 aggregate

Exposed importers

Shocked exporters: Indonesia, Malaysia

Strait of Malacca

via Strait of Malacca / Singapore Strait

Route share unknown — No sourced seaborne palm-oil Malacca share; only weak generic claims. Corridor-share research (Sep 2026): no commodity-specific corridor figure found in public sources -- not zero, just unsourced.

Everything through the Strait of Malacca →

Suez Canal

via Suez Canal

Route share unknown — No sourced figure for palm oil via Suez. Corridor-share research (Sep 2026): no commodity-specific corridor figure found in public sources -- not zero, just unsourced.

Everything through the Suez Canal →

Cape of Good Hope

via Cape of Good Hope (Suez/Red Sea fallback)

Route share unknown — Fallback lane by nature (Suez/Red Sea fallback); no stable share exists. Corridor-share research (Sep 2026): no commodity-specific corridor figure found in public sources -- not zero, just unsourced.

Everything through the Cape of Good Hope →

How we map this

Exporter and importer shares are 2024 vintage · annual data, 1–2y lag from UN Comtrade and OEC (BACI/CEPII); an importer counts as exposed when ≥20% of its palm oil imports come from a shocked exporter. The shock geography is the scenario’s own focus selection. Annual data with a 1–2 year reporting lag — the structure moves slowly, the prices don’t.

4Adjust the assumptions

El Niño strength (peak RONI)Very strong (≥2.0°C RONI)

Historical check: No palm oil episode on record — no historical range to compare this setting against.

What share of Indonesia + Malaysia’s palm oil exports is disrupted.

Resolution: Peak RONI (Relative ONI — CPC's verification index) in any overlapping 3-month season, per NOAA CPC — ≥2.0°C = very strong, ≥2.5°C = historic

Share of world exports

Indonesia + Malaysia palm oil — 82.7% of world Palm oil exports (Share of global export value (USD) — 2024 vintage)

Exposed under your assumptions: 57.9% (82.7% × 70% severity)

The hatched area is modeled from your assumptions, not a measured outcome.

Exposed ≠ lost — affected trade can reroute, draw stocks, or substitute. This sizes the exposure, not the damage.

180d

Historical check: No palm oil episode on record — no historical range to compare this setting against.

Resolution: Length of the SE Asian growing-season moisture deficit (USDA FAS: palm yields decline 4–12 months after stress)

60d

Your assumption — not a measured buffer.

Resolution: Assumed days of stockpile cover — an assumption, not a measured buffer

Disruption timeline
090180270365 days
Disruption: 180 days
Assumed cover: 60 days — your assumptionYour assumption

120 days buyers can't ride out — not automatically a physical shortage

What this would have meant

At these settings, about 57.9% of the world's palm oil exports would be exposed to the disruption, and the disruption runs 180 days against 60 days of assumed stockpile cover, leaving about 120 days beyond what the assumed stockpile covers.

No close historical match in our records — this scenario is outside our recorded experience.

What this assumes
  • Exposure: Target share 82.7% × severity 70% = 57.9% exposed.
  • Uncovered days: max(0, 180 − 60) = 120.
  • Exposed ≠ lost: affected trade can reroute, draw down stocks, or find substitutes — this number sizes the exposure, not the damage.
  • Exporter share ≠ spare capacity: rivals may not be able to surge supply to fill the gap.
  • Combined share is the sum of the focus exporters' individual shares — a scenario hitting all of them at once.
  • Stockpile cover of 60 days is your assumption, not a measured buffer.
  • Results are physical-exposure arithmetic from your stated assumptions — not a price forecast.

Analog check

No close historical match in our records — this scenario is outside our recorded experience.

Want the full controls? Reopen palm oil on its commodity page.

5What happened before

For perspective, not prediction

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

Recurring — 2009-10, 2015-16, 2023-24

“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.”

Price moves were observed around the event — not proof the event caused the entire move.

Read the full record

What to watch

  • NOAA CPC's monthly ONI table and strength probabilities — very strong means ≥2.0°C RONI in any overlapping 3-month season; historic means ≥2.5°C
  • SE Asian rainfall through Sep–Nov: MPOC's CEO says that window determines how severe 2027's palm output hit is, since impact lags 9–12 months
  • Indonesian peat-fire and haze reports — haze amplified yield damage in 1997–98
  • MPOB and USDA FAS cuts to Malaysian and Indonesian palm-oil production estimates
  • CPC's monthly ENSO discussion — the advisory and strength probabilities are the live read on where the event is heading

Curated by Morrowfly — these are things to check, not monitor conditions.

Make it yours

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Tell us

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Read by a human · never auto-published

Illustrative scenario. Not a prediction. Not financial advice.

Monitor data as of Sep 24, 2026 · Trade vintage 2024 · Scoring v3.2

What if this El Niño is the strongest since 1950? | Morrowfly