El Niño prompts potential billions‑worth agricultural losses in Brazil

The 2026‑27 El Niño is forecast to become one of the strongest on record, with a high probability of reaching "very strong" intensity. In southern Brazil and Argentina the event could raise rainfall and boost soybean, corn and coffee yields, but analysts warn it may also generate a super‑supply that depresses grain prices and strains storage capacity. A study by Allianz Research noted that even a 4 % increase in soybean output could lower farm revenue because demand for food is relatively inelastic.

In Brazil’s northeast state of Bahia, the Federação da Agricultura e Pecuária da Bahia (FAEB) warned that a Super El Niño could cause economic damages exceeding R$ 13 billion, affecting livestock, maize, beans, cassava and coffee production. Federal agencies such as INMET, INPE, and CEMADEN are monitoring the event, which is expected to bring above‑average temperatures to the north and reduced rainfall across much of the Nordeste, heightening drought risk while the south may see excess moisture.

The combined outlook suggests regional asymmetry: gains for producers in the south, heightened financial pressure for those in drier regions, and broader implications for food‑price inflation, credit exposure and energy generation in Brazil.