No sharp price surge expected due to adequate global stocks of food commodities

19-Jun-2026 03:32 PM

New Delhi: Although a strong El Niño is likely to cause adverse weather and rainfall conditions in many parts of the world this year—potentially leading to a decline in global production of agricultural and food commodities (including grains, pulses, and oilseeds) and keeping prices high—market experts believe that the supply situation will remain manageable due to substantial existing global stocks. Consequently, an unexpected or massive spike in prices is unlikely.

Analysts note that weather conditions are expected to remain largely normal in some key agricultural regions, and global food grain stocks are hovering near record levels. In anticipation of the El Niño threat, import-dependent nations facing potential shortages have begun formulating precise contingency plans. As a result, international market prices are likely to see only a limited rise in the coming months.

El Niño typically intensifies heat, lack of rainfall, and drought conditions across Asia, while posing a risk of excessive rainfall and flooding in North and South America. Both scenarios carry the risk of damage to various crops.

Since this year's El Niño could prove more severe than previous occurrences, analysts worldwide are offering varying predictions regarding volatility in agricultural commodity markets. The Food and Agriculture Organization (FAO) reports that rice and wheat production in India has reached new record highs, while soybean production in Brazil has surged to an all-time peak.

Excellent lentil production is anticipated in Australia, Canada, and Russia, alongside prospects for strong maize yields in the US, China, and Brazil. Sugar prices may remain somewhat firm.