A strong El Nino weather event, officially declared in June, is beginning to exert significant influence on the global economy, affecting industries ranging from aquaculture to mining and shipping. Scientists warn that this El Nino, driven by unprecedented Pacific Ocean temperatures exacerbated by climate change, ranks among the most intense on record and is expected to persist into 2027.

In northern France, Innovafeed, a company that produces insect protein from black soldier fly larvae as an alternative to traditional fish meal, has seen a surge in demand. Peru’s early suspension of its anchovy catch, motivated by concerns over El Nino’s impact on fish stocks, has caused fish meal prices to reach record highs. “In the last two months we have secured more demand than in the past two years,” said Clément Ray, Innovafeed’s CEO, highlighting the supply chain disruptions triggered by the phenomenon.

El Nino’s far-reaching effects are also evident in shipping through the Panama Canal. Reduced rainfall in Panama—34% below the historical average from May to August—has lowered water levels in Lake Gatún, the canal’s main reservoir. To manage the shortage, canal authorities plan to reduce daily ship transits from 36 to 32 by mid-September. The reduced capacity has driven auction prices for transit slots to approximately $2.5 million, from typical rates near $800,000. Panama is investing $2 billion in infrastructure projects, including river diversions, to augment water supplies supporting the canal, which handled cargo worth $4 billion in 2025.

In Chile, heavy snowfall in July caused by an atmospheric river associated with El Nino forced copper producer Antofagasta to lower its production forecast after operations were disrupted at the Los Pelambres mine. The event follows a tight copper market fueled by rising demand linked to green energy and digital infrastructure. Analysts warn that other copper operations, including those in Zambia and Papua New Guinea, are already experiencing weather-related logistical challenges.

Despite the disruptions, El Nino may offer some benefits. A typically strong El Nino tends to reduce the frequency of Atlantic hurricanes, potentially easing pressures on insurers. Energy analysts suggest a milder European winter could lower demand for imported liquefied natural gas. Meanwhile, winter sports operators in the United States are hopeful for increased snowfall across the Rocky Mountains, a phenomenon that would boost reservoirs vital to the drought-stricken US Southwest.

Agriculture is confronting mixed conditions. While global crops such as wheat, maize, rice, and soy have started the season generally well, emerging dryness in Southeast Asia’s rice-growing regions raises concerns. Indian monsoon rains are reported to be 13% below average, threatening harvests crucial to global food security. Rice in southern and Southeast Asia is seen as particularly vulnerable, with previous El Nino events having contributed to export restrictions and price spikes.

Governments and economists acknowledge the challenges ahead but express cautious optimism. Indonesian President Prabowo Subianto has emphasized the country’s preparedness despite recent climate-related wildfires linked to El Nino. Analysts from S&P Global Ratings have pointed to increased grain reserves and water management investments as key to mitigating the economic impacts, even as El Nino’s effects remain unavoidable.

Commodity markets are responding to these risks. Cocoa and sugar prices have risen on fears that El Nino could disrupt harvests, though some major producers and buyers, including Hershey, maintain they are better positioned than during previous cycles. Nonetheless, some investors anticipate significant market volatility. Les Finemore of hedge fund Moreton Capital Partners described the situation as "dramatic" with potentially severe repercussions, warning that complacency could expose companies to major supply shocks.

In the aquaculture sector, firms like Norwegian salmon producer Mowi continue adapting their operations to counter El Nino-related environmental challenges. Following losses in 2016 caused by warm water-induced algal blooms, Mowi is employing techniques such as underwater lighting to encourage salmon to seek cooler, deeper waters.

As El Nino continues to unfold, its complex and interlinked impacts are reverberating across diverse economic sectors worldwide, underscoring the broader risks posed by intensifying climate variability.