El Niño” threatens the global economy: extreme weather, higher food prices and consequences that could last for years

By the end of the year, the planet could face a powerful “El Niño” expected to bring extreme weather conditions, higher food prices and a blow to the global economy.

Experts warn that a “super” El Niño could develop, ranking among the strongest recorded over the past 140 years. In addition to changing weather patterns, this natural phenomenon could increase living costs and cause serious economic consequences around the world.

Economic damage estimated in the trillions of dollars

Climate expert Christopher Callahan says previous El Niño episodes have left behind extremely large economic losses. “The 1982-1983 El Niño caused more than $4 trillion in global economic losses, which were felt for up to five years after the phenomenon. Meanwhile, the 1997-1998 event caused around $5.7 trillion in economic losses,” he told DW.

How does El Niño form?

El Niño is a climate phenomenon that usually recurs every 2 to 4 years and is characterized by the warming of the waters of the Pacific Ocean. Its emergence may be accompanied by severe droughts, heavy rainfall, floods and extreme heat waves.

Its impact spreads across numerous regions of the world, where infrastructure, agricultural production and the functioning of supply chains may be damaged.

Food production and agriculture face risks

The climatic consequences of El Niño may directly affect the amount of food produced. In India, extreme temperatures and changes in wind cycles have increased the risk of drought. Vietnam, meanwhile, has warned of intense heat waves, massive flooding and an increase in rainfall of up to 50%.

These conditions could reduce agricultural yields and, consequently, drive up food prices in international markets.

Waterways and global trade under pressure

The effects of El Niño may also extend to strategic waterways. In Panama, falling water levels limited the number of ships allowed to pass through the Panama Canal. This situation slowed global trade and caused losses of millions of dollars.

The case demonstrates that the phenomenon affects not only weather conditions, but can also directly hit supply chains and the global economy.

Chocolate prices at risk of rising

The international cocoa market has also begun to feel the effects of El Niño. Côte d’Ivoire, the world’s largest cocoa producer, has slowed sales and raised prices amid concerns that drought could damage future crops.

For consumers around the world, this could translate into higher chocolate prices.

Fishing industry faces a blow

In Peru, the impact of El Niño is particularly visible in the fishing industry.

“One of the concrete ways Peru is affected is through the closure of fishing activity that depends on nutrient-rich waters rising from the depths of the Pacific Ocean under normal conditions,” Callahan explains.

The disruption of this activity causes significant financial consequences for the region and for communities that make their living from fishing.

Economic effects could last for years

Experts note that the economic damage caused by El Niño does not necessarily become apparent immediately.

Rebuilding infrastructure and restoring agricultural production may give economies a temporary recovery. However, studies show that after extreme climate events, many countries experience 5 to 10 years of slower growth without a full recovery.

Measures being taken by governments

To limit the damage, a number of countries have begun making preparations in advance. Panama has drawn up plans to ration water in an effort to prevent another blockage of the Panama Canal. Meanwhile, Bangladesh has funded scientific research and the development of early-warning systems for natural disasters.

Paul Roundy, a professor at the University at Albany in the United States, estimates that these interventions have produced tangible results. “The number of people who lose their lives in storms has fallen significantly. While hundreds of thousands of victims were recorded in the past, today in many cases the figure is only in the dozens,” he emphasizes.

El Niño continues to be considered one of the most powerful climate phenomena on the planet. Beyond weather changes, it can make food more expensive, hinder international trade, damage the agricultural sector and slow economic growth for many years. For this reason, experts say, timely preparation and investment in warning mechanisms are crucial to mitigating its consequences./ DW