The El Ni帽o weather phenomenon that is disrupting the climates of South America and Asia has strengthened to the most intense level on record and may cause widespread economic disruption, with effects that could persist long after the event fades, according to the Japan Meteorological Agency.
In a bulletin released on Friday, the agency said that through September, sea surface temperatures in parts of the tropical Pacific it monitors were 4 degrees Celsius above normal, the highest since records began in 1949. The previous record occurred in December 1997, when sea temperatures were 3.7 degrees Celsius above normal.
El Ni帽o has already unsettled global weather patterns. The climate event has made India鈥檚 monsoon the weakest in more than a decade, worsened wildfires in Indonesia, sent toxic haze drifting into neighboring Singapore and Malaysia, and threatened sugar and coffee output in Brazil.
Where to start
Just one day before the Japan Meteorological Agency released its outlook, the World Meteorological Organization said in its latest seasonal forecast that this El Ni帽o is expected to become the strongest on record. The WMO's forecast is based on the Ni帽o 3.4 region, which overlaps with the Ni帽o 3 region monitored by Japan but lies farther west.
The Japan Meteorological Agency predicts a 100% probability that El Ni帽o will persist through the Northern Hemisphere winter, consistent with the assessment of the U.S. Climate Prediction Center that the climate-disrupting phenomenon will definitely continue from January to March.
Why this matters for commodities and markets
For investors tracking agricultural commodities, the intensifying El Ni帽o adds another layer of uncertainty to global food supply and prices. Products linked to the ELEMENTS Linked to the Rogers International Commodity Index - Agri Total Return (RJA) can be particularly sensitive to shifts in weather-driven crop conditions. As the event strengthens, its impact on staple crops and soft commodities may become more pronounced across key producing regions.