Five times in six years! La Niña is coming again, and the global agricultural supply chain will be affected

A new round of La Niña is forming, marking the fifth occurrence in the past six years.

Recently, frequent floods across Asia and early snowstorms in many parts of the United States have emerged as signals of La Niña’s return. This periodic cooling of waters in the Pacific Ocean will disrupt the global weather system, posing significant risks to agriculture, energy markets, and supply chains.

For the markets, the return of La Niña ushers in a new wave of uncertainty. According to data from Aon, a leading reinsurance brokerage and data analytics firm, global economic losses caused by La Niña in recent years have ranged from $258 billion to $329 billion per event. Extreme weather is becoming an increasingly critical factor driving up economic losses and influencing decision-making in the insurance, agriculture, and energy sectors.

Currently, the market is closely monitoring La Niña’s potential impact on global staple crop yields and its boost to energy demand during the Northern Hemisphere winter. Although meteorologists predict that this round of La Niña will be weak and may be approaching its peak soon, its effects are expected to last for months, adding volatility to commodity price trends.

La Niña refers to a phenomenon where sea surface temperatures in the eastern and central equatorial Pacific cool significantly and persistently, accompanied by changes in tropical atmospheric circulation, including shifts in wind patterns, air pressure, and rainfall distribution.

## Frequent Extreme Weather Events Inflict Severe Economic Losses

The impacts of La Niña are already being felt. According to data compiled by Bloomberg, floods in Vietnam and Thailand from November to December have killed at least 500 people and caused economic losses exceeding $16 billion. Researchers at the World Weather Attribution note that while not all disasters can be directly linked to La Niña, this pattern is consistent with its historical behavior.

"La Niña’s contribution to excessive rainfall in Southeast Asia is claiming lives and destroying infrastructure," said Bill Hare, CEO of Climate Analytics.

Historical data shows that La Niña is often associated with droughts in California, Argentina, and Brazil, while also intensifying hurricane activity in the Atlantic Ocean. For instance, Hurricane Helene, which killed over 250 people in the southern U.S. in 2024, may have been fueled by La Niña conditions.

## Agricultural Markets Face Uncertainty

Global agricultural markets are on high alert. Studies published in the journal *Environment and Development* indicate that La Niña is typically associated with reduced yields of corn, rice, and wheat.

### Americas

As the world’s largest soybean exporter, Brazil is wary of the risk that La Niña may bring reduced rainfall to its southern growing regions. Meteorologist Marco Antonio dos Santos points out that current forecasts suggest irregular rainfall in the country’s south-central areas.

### Asia

Luiz Roque, Market Intelligence Coordinator at Hedgepoint Global Markets, notes that below-average temperatures expected in China could threaten winter wheat production. In Southeast Asia, heavy rainfall may disrupt palm oil harvesting and transportation, according to Kang Wei Cheang, an agricultural broker at StoneX Group Inc. in Singapore. However, the increased soil moisture could also benefit crop recovery in 5 to 12 months.

## Northern Hemisphere Winter Energy Demand Set to Rise

La Niña typically brings colder winters to parts of North America and East Asia, thereby driving up demand for heating fuels.

In the United States, La Niña usually leads to lower temperatures and heavier snowfall in western Canada, the Pacific Northwest, the northern Rocky Mountains, and the Great Lakes region. This year, Chicago recorded its snowiest single day in November on record. Paul Pastelok, a long-range forecaster at AccuWeather Inc., states that La Niña is "fueling" cold and snowy conditions in northern parts of the U.S. This pattern also applies to northern China and Japan, potentially leading to higher energy consumption and straining utility providers.

## A New Normal Amid Climate Change?

Five La Niña events in six years are part of a broader trend where La Niña has been more prevalent than El Niño over the past 25 years. Michelle L’Heureux, a forecaster at the U.S. Climate Prediction Center, notes that scientists are still studying this shift—some believe climate change may be influencing the cycle, while others attribute it to natural variability.

Bill Hare emphasizes that while La Niña is a natural cycle, its impacts "are being altered and amplified by global warming". He argues that the long-term warming trend caused by human activities is modulating and even exacerbating extreme weather events triggered by natural phenomena like La Niña.

Meteorologists predict that the current La Niña event may be peaking or will reach its peak in the coming weeks, after which the equatorial Pacific will return to neutral conditions. Even so, its impact on the global weather pattern will not end immediately, with related effects likely to persist for months.

## Risk Warning and Disclaimer

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