As the world witnessed the third warmest May, the fears of a strong El Niño grow. The last El Niño was during 2015-16 but the worst one was 1997-98. The phenomenon is defined to occur when the sea surface temperature is above the normal average. According to consolidated for-care models, the current cycle would last till January 2024 with almost 1 degree Celsius above the normal.
Though various countries get impacted by it in different proportions the impact on agriculture is common. The main crops that get impacted are rice, sugar and cereals. Even the corporates have started mentioning the weather-related impact on future earnings.
This might make another global emergency in the months to come, that needs a global solution. But given the current environment, it is less likely to happen. This would result in countries putting a further export ban on essential crops and leaving the import-dependent countries in a further mess as inflation and hunger continues.
The magnitude of impact would be only witnessed by next year as the ending stock declines along with the restricted food supply chain. This would also make life further difficult for central banks as good inflation might remain higher for longer in many countries.