The return of El Niño in 2026 threatens global agricultural production and could drive up food prices. Inflation, expected to ease with hopes of opening the Strait of Hormuz, has instead grown over the summer. The truce between Washington and Tehran has failed, and a lasting unblocking of the Strait now seems unlikely. Hydrocarbon prices may stay high for some time.
Food inflation, moderate since January, now risks accelerating due to rising costs for fertilizers and diesel, hit by Middle East tensions. Historic summer drought has also cut production. Fruit and vegetable prices are already rising, reviving memories of the 20 percent price surge in 2022-2023.
Supermarket bosses have promised stable food prices until February 2027, between 0 and 1 percent. But they refuse to renegotiate purchase prices set in February 2026, valid for a year. Most increases will be felt from March, after the next round of talks, and could become a key issue in the presidential campaign.
El Niño will add its first effects on prices, altering global weather with higher temperatures, more droughts and floods. UniCredit says it could cut global agricultural production by 14.3 percent. Goldman Sachs predicts a 15.8 percent rise in global agricultural commodity prices by late 2028, with sharp increases for rice, palm oil, sugar, coffee, and soybeans.
It is estimated that 25 to 30 percent of the global price rise could feed into eurozone food inflation, adding 0.3 to 0.5 percentage points to overall inflation within 6 to 18 months. The poorest households will be hit hardest. Wage increases may not keep up with inflation.
A European Central Bank rate hike to calm inflation would make loans more expensive and reduce purchasing power. Presidential candidates’ proposals, whether tax hikes or spending cuts, also mean losses for those affected.
Reference
Le Monde, “El Niño aura des effets sur l’inflation en Europe,” published August 31, 2026. https://www.lemonde.fr/idees/article/2026/08/31/el-nino-aura-des-effets-sur-l-inflation-en-europe_6761899_3232.html