PACIFIC OCEAN — There is a 63% chance that El Niño will evolve into a very strong event, informally known as a 'Super El Niño,' heading into 2027, according to the U.S. Climate Prediction Center. El Niño is a weather pattern associated with sustained warming of Pacific Ocean surface temperatures.

The current impact of El Niño is evident in regions including a delayed start to the Indian monsoon and a temporary halt to Peru's fishing season. A Dartmouth College study found that the strong El Niño events of 2015 and 2016 resulted in over $7.8 trillion in lost productivity.

In Indonesia, hotter and drier conditions typically reduce palm oil yields. Global production of corn and wheat may also be negatively affected by El Niño, according to UBS Group AG. The firm also stated that sugar output in Asia might see negative impacts. India has banned sugar exports until the end of September.

Improved rainfall in Argentina and higher sugar prices may benefit Latin American companies such as São Martinho and Adecoagro SA, according to Morgan Stanley. UBS analysts stated that El Niño has generally supported soybean output, particularly for major producers in the U.S. and southern Brazil. Berenberg chemicals analyst Sebastian Bray identified fish oil producers as potential beneficiaries, and Peruvian fish oil prices have reached record highs in recent months. Scotia Capital Inc. analyst Ben Isaacson wrote that nitrogen fertilizer stocks like CF Industries Holdings Inc. and Nutrien Ltd. are positioned to benefit from El Niño.

Conversely, dryness caused by El Niño has begun to slow demand for potash, according to RBC Capital Markets analyst Andrew Wong. RBC analyst Arun Viswanathan wrote that lower yields could compel farmers to increase spending on technology and crop protection chemicals to maintain crop income. Higher temperatures may lead to reduced heating demand in North America, which could affect natural gas stocks such as APA Corp., EQT Corp., Range Resources Corp., and EOG Resources Inc. Truist Securities Inc. analyst Gabe Daoud wrote that all indications point to a rare El Niño event, bringing cooler summer and warmer winter temperatures in the U.S. and thus a bearish natural gas demand environment. In Asia, higher temperatures will increase air-conditioning use and strain power grids, with energy prices already elevated. Chinese power companies including Guangdong Electric Power Development Co. and Jinneng Holding Shanxi Electric Power Co. have shown strong gains this year, with the latter rising 64%. According to Jefferies Financial Group Inc. analysts, companies like JSW Energy Ltd. and Adani Energy Solutions Ltd. in India may benefit from the surge in energy demand.

Heavier rainfall in parts of South America could disrupt transportation networks and potentially affect mining operations, including copper production in Chile and Peru, according to Ole Hansen, head of commodity strategy at Saxo Bank. Copper miners with operations in these regions, such as Freeport-McMoRan Inc. and Anglo American Plc., may be affected. UBS estimated that economic growth in Indonesia could decrease by 1% after four quarters due to El Niño, as drought damages agriculture and mining. The hurricane-weakening effects of El Niño may positively impact property and casualty insurers in the Northern Hemisphere.

No independent assessment of Super El Niño’s claims was available.