For most of this year, analysts described the strongest El Niño event in over a century as a manageable challenge. The prevailing view was that decades of investment in higher-yielding seeds, precision irrigation and early-warning systems had made the global food system more resilient than it was during comparable shocks in 1997-98 and 2015-16. Near-record grain stockpiles and the rise of new export powers, chiefly Brazil and Russia, provided a cushion that did not exist a generation ago.
That resilience is now colliding with a more complex reality. In the space of a few weeks this summer, two separate wars began eating into global grain and fertiliser supply chains at the same time El Niño is intensifying toward what US forecasters describe as a potential once-in-150-years peak. The result, visible in data from early August, is a food system that is better prepared than in the past but is now absorbing shocks from three directions simultaneously.
The resilience case and its limits
The underlying logic of food-system resilience remains sound. World farm production has outpaced population growth since the 1980s, driven by better crop varieties, expanded fertiliser use and improved irrigation, according to the UN Food and Agriculture Organization (FAO). Drought-tolerant corn hybrids adopted across Africa and the Americas since 2015, along with heat-tolerant wheat varieties in India and Australia, have measurably reduced the yield losses farmers once suffered in dry years. Andrew Whitelaw of Australian agricultural consultancy Episode 3 has argued that better irrigation management and crop science now allow marketable yields even under drought stress—a meaningful shift from the crop failures of past El Niño cycles.
However, that framing, largely built on the situation as it stood in June and early July, has not kept pace with events. The FAO Food Price Index—the clearest real-time gauge of the system’s health—averaged 131.1 points in July, its highest level in more than three years and up for a second straight month. Cereals rose 3.4 percent and wheat jumped 5.8 percent on the month. This is not the signature of a food system quietly absorbing a weather shock; it is the signature of a system facing compounding disruptions to two of its largest wheat suppliers at once.
The Black Sea gap
The most significant gap in the “resilience” narrative is the near-collapse of Black Sea grain shipping over the past month—a development that postdates most optimistic commentary. Russian strikes on Odesa and surrounding port infrastructure have effectively halted commercial vessel traffic at Ukraine’s main export hub since late July, according to Ukraine’s Agriculture Ministry. The ministry has cut its 2026-27 grain export forecast by as much as 54 percent, to roughly 29.6 million tonnes from an earlier estimate of 64.4 million tonnes; wheat exports alone are projected to fall by more than half. Ukraine’s infrastructure ministry recorded dozens of attacks on port facilities and vessels in July alone, and alternative routes—river barges, rail, trucking—can replace only a fraction of lost seaborne capacity.
Russia, the world’s largest wheat exporter, is also struggling. Moscow’s closure of the Kerch Strait in mid-July cut off roughly a quarter of its export capacity. Consultancies including SovEcon and ProZerno now expect Russian grain exports to hit a decade low in August—potentially as little as 2.5 million tonnes for the month against a five-year average above 5.5 million. Together, Russia and Ukraine normally supply close to a third of the world’s traded wheat. Both channels are now degraded simultaneously, a scenario not part of the base case when the “resilient food system” argument was first presented earlier this year.
The Strait of Hormuz chokepoint
The Iran war and its effects on the Strait of Hormuz have proven more durable than initial ceasefire announcements suggested. A US-Iran ceasefire reached in April broke down in July after Iranian forces resumed attacks on vessels using shipping routes Tehran had not authorised. This prompted Washington to reimpose a naval blockade that has since redirected dozens of commercial ships and disabled several others, according to US Central Command. Talks between Iran and Oman over a safe-passage arrangement continue, but a draft agreement remains stuck pending approval from Iran’s Supreme Leader, and traffic through the strait has at times fallen to fewer than ten vessels a day.
The agricultural consequence runs mainly through fertiliser. Roughly a third of global seaborne fertiliser trade, including a large share of urea, ammonia and the natural gas feedstock used to produce them, normally transits Hormuz. Analysis from the University of Illinois’s farmdoc project suggests that diammonium phosphate prices could remain in the $866-to-$945-per-ton range under continued disruption, well above the roughly $622 pre-crisis benchmark from February. These costs fall hardest on farmers in South Asia and Africa who rely on Gulf-sourced fertiliser and have far less pricing power than producers in the US or Europe.
Where buffers are holding
Not every part of the resilience story has weakened. Brazil’s soybean harvest has exceeded expectations: a record crop of roughly 180 million tonnes is on pace to generate record exports near 116 million tonnes for the year, with China absorbing an outsized share amid the ongoing detour of Chinese demand away from US supply. That cushion is sector-specific; Brazil’s surplus offsets stress in oilseeds and, to a lesser extent, corn, but it does little to relieve the wheat market, where South America is a marginal player. India, meanwhile, has moved from crisis to buffer on rice. After lifting most of the export restrictions imposed in 2023, New Delhi is sitting on stockpiles so large they are straining storage capacity, insulating the roughly 3 billion people worldwide who depend on rice as a staple from the price spikes currently hitting wheat.
India’s monsoon, however, is a genuine vulnerability. As of mid-July, 397 of India’s 741 districts had recorded below-normal rainfall, with the Gangetic plains—a core rice-growing belt across Uttar Pradesh, Bihar and Jharkhand—among the hardest hit. Overall kharif sowing is running roughly 10 percent behind last year’s pace. Reservoir storage across southern India stood as much as 41 percentage points below year-earlier levels as of late July. Forecasters at ICRA now expect the full monsoon season to land near 90 percent of the long-period average, which would mark one of the weaker seasons of the past decade even as El Niño builds toward its projected September-to-December peak.
Compounding risks
FAO chief economist Maximo Torero, who earlier this year framed the outlook mainly in terms of improved forecasting and market transparency, has sharpened his warning. He told Reuters this month that the wars in Iran and Ukraine, combined with mounting El Niño risk, constitute a compounding set of pressures likely to push costs and yield losses higher into 2027. The FAO and the World Food Program’s first-ever joint anticipatory action appeal—$202 million aimed at protecting nearly nine million people across 22 high-risk countries—reflects a shift from a reactive posture to one bracing for concurrent shocks. UN projections now put the number of people who could be pushed into acute food insecurity by the El Niño event alone at up to 49 million by the end of 2027, on top of populations already destabilized by the two conflicts.
The food system is more resilient than it was in 1997 or 2015, thanks to better seeds, deeper stockpiles and sharper forecasting. However, the resilience argument circulating through much of the summer was implicitly a bet that shocks would arrive one at a time. What is unfolding in August is three shocks arriving together—a record-strength El Niño, a Black Sea grain war that has cut off close to a third of global wheat trade from two directions, and a Hormuz fertiliser chokepoint that has not fully reopened despite three separate ceasefire attempts since April. Individually, the system’s buffers can likely absorb any one of these. Whether they can absorb all three simultaneously, for the several months it will take El Niño to peak and recede, remains an open question.
