Resilient Crop Inputs (bred seed, nutrients, protection)

India's meteorological department has reported that an intensifying El Niño is putting India at risk of its driest monsoon season in 17 years, after cumulative rainfall from June to September came in 15% below the long-term average. That could weigh on agricultural output and further stoke food inflation, which climbed to 5.95% in August. The report said that if dry conditions persist, this year's monsoon will be the weakest since 2009, when rainfall was 18% below normal, potentially affecting both the current harvest and the next planting cycle. Food costs rose for a seventh straight month in August. The meteorological office had forecast in May that rainfall this season would be 10% below normal. Christian Werner, managing director of the consultancy Global Weather Climate Analytics in Australia, said weather conditions could favor cyclone formation in the Bay of Bengal in the final week of September, which may help bring critically needed rain to eastern and northeastern India and ease drought conditions there. Adequate monsoon rainfall is crucial for the hundreds of millions of Indian farmers who rely on seasonal rains to grow their crops, with India among the world's largest producers of rice, sugar and cotton.

Verisk Maplecroft, a risk consultancy, warns that erratic weather and the fallout from the Iran war could heighten food security risks in Asia and may lead to social unrest and political instability in vulnerable countries such as India, Indonesia and the Philippines. In a report published on 17 September, it said the Iran war has affected the supply of fuel and fertiliser, key inputs for the agricultural sector, while extreme weather from a strong El Niño is also hitting farm output in several Asian countries. Indonesia, the world's largest palm oil producer, is battling hard-to-control wildfires that are disrupting harvests, while India, the world's largest rice exporter, has seen monsoon rainfall 15% below normal. Thailand, meanwhile, is likely to see a sharp drop in sugar output and remains heavily dependent on energy and fertiliser imports, while facing pressure from farmers' debt burdens ahead of the next planting season. Data from Verisk Maplecroft's food security index shows that more than half of the countries at high or critical risk on food security are also in the two highest-risk groups on its civil unrest forecast index, including India, Bangladesh, the Philippines and Indonesia. Protests have already broken out in the Philippines and Indonesia in recent weeks, and Verisk Maplecroft warns that if pressure from food prices and supplies intensifies and governments are seen as responding ineffectively, it could lead to unrest and political instability in these high-risk countries. In countries already facing conflict, such as Afghanistan and Myanmar, a food shock could increase the risk of a humanitarian crisis.

Jefferies warned that six consumer stocks could be disrupted by a Super El Niño this year and into 2027, part of a larger multi-sector list of names the firm identified as at risk. Current forecasts suggest the 2026-27 El Niño may be the strongest in modern history, and the firm noted that, unlike most climate risks, El Niño is highly trackable months in advance, giving investors an opportunity to identify economic consequences before they fully materialize. Analyst Scott Marks said Hershey carries concentrated cocoa exposure through its core U.S. chocolate portfolio and has built its 2027 margin recovery plan around expected cocoa deflation, warning that a Super El Niño driving a hotter, drier West African 2026/27 crop would undercut the central pillar of that recovery story. J.M. Smucker is exposed through its coffee portfolio, with sourcing potentially impacted for Brazilian arabica and Vietnamese and Indonesian robusta, while Mondelez International faces El Niño exposure through cocoa, with roughly 60% of supply in Côte d'Ivoire and Ghana, where strong events historically turn hotter and drier heading into the November-January harvest. Analyst Pedro Baptista noted PriceSmart derives approximately 11% of sales from Colombia and also operates across Central America, and analyst Anne Ling said Yum China could see extreme rainfall, flooding and adverse weather temporarily reduce dine-in traffic and disrupt logistics and delivery efficiency, while analyst Alex Wright highlighted that a sharp rise in sweetener costs could pressure margins at Coca-Cola FEMSA if cost increases outpace pricing actions.

OCBC Group Research expects the El Niño phenomenon to expose ASEAN countries to greater inflation risk than to an economic slowdown, with higher prices for rice, wheat, corn and vegetable oils set to be key factors weighing on their economies. Lavanya Venkateswaran, a senior economist for ASEAN and India affairs at OCBC, said in a report published on September 9 that the Philippines, Indonesia and Thailand are the ASEAN countries at high risk from El Niño, while Malaysia and Vietnam face significant risk as well, though of a more concentrated kind. She said that apart from Thailand and Vietnam, most major economies in the region are net rice importers, leaving the Philippines, Malaysia and Indonesia exposed to terms-of-trade effects from higher rice prices, and noted that most of the ASEAN-6 are large net importers of grains, making them especially vulnerable to imported inflation pressures when wheat and corn prices rise on world markets. The impact on economic growth is expected to be concentrated in the agricultural sector, with Indonesia, the Philippines, Thailand and Vietnam, which have large agricultural sectors, vulnerable to lost output and lower rural farm incomes, while agricultural exporters such as Indonesia, Malaysia, Thailand and Vietnam may receive some offset from higher commodity export earnings.

The Food and Drink Federation (FDF) said on the 9th that it expects UK food inflation to rise to nearly 4% by the end of the year and to exceed 6% by the middle of next year. The forecast reflects the ongoing effects of the war between the United States and Iran, drought in Europe, and the El Niño phenomenon. The FDF projected that food and non-alcoholic drink price growth in December of this year would be 3.9% year on year, a sharp downward revision from its previous forecast of just under 10%, but it expects prices to keep rising next year and to peak at 6.4% in July next year. Chief Executive Karen Betts noted that food and drink manufacturers have kept food prices as low as possible during the energy crisis that has persisted since the closure of the Strait of Hormuz, but said this cannot continue indefinitely. She added that with energy, logistics, and packaging costs remaining high, combined with this summer's intense heat, food prices are expected to rise through the end of the year and to continue rising into next year. According to the FDF, food inflation is expected to remain well above its historical average in the second half of 2027, and while the peak will be lower than forecast in April, the flat trend is likely to be prolonged. According to the UK Office for National Statistics, food and drink inflation fell to 1.3% in July, the lowest level since August 2024. The UK consumer price index rose 2.9% in July, and the Bank of England forecasts that food inflation will reach 3.5% by December and that CPI growth will accelerate to 3.1%.

In the summer of 2025, Japan's average temperature was 2.36°C above the normal, marking the highest since records began in 1898, and the third consecutive year of record highs. This extreme heat has damaged crops and livestock, leading to reduced supplies and higher prices for eggs, rice, and vegetables. For example, in Ibaraki Prefecture, egg production rates have dropped by 10-20%, and the ratio of top-grade Koshihikari rice from Niigata Prefecture has fallen to just a few percent. According to Teikoku Databank, the average price of a curry rice meal has hit a record high of 365 yen, with an index of 142.6 compared to the 20-year average. If temperatures continue to rise, a plate of curry rice could cost around 500 yen by the 2040s, prompting consumers to consider new rice varieties and adjust storage methods.

Kasikorn Research Center assesses that the Thai economy in the period ahead could grow below 2%, with 2026 expected at around 2% amid pressure from stricter environmental regulations, natural disasters, and geopolitical conflicts. Ms. Kaewalin Wangpichayasuk, Deputy Managing Director, said Thai businesses face three main risks: the European Union's CBAM measures affecting steel and aluminium, drought and flash floods from a super El Niño pressuring agricultural output, and Middle East conflicts plus trade wars making transport and energy more expensive. Manufacturing and processed agriculture are the most worrying sectors, while clean energy, health, technology, and FDI businesses have growth opportunities. The government should monitor and issue warnings, reduce hidden costs, and design targeted policies to help entrepreneurs adapt.

Denali, the nation's largest food and organics recycler, is offering a natural fertilizer alternative that can save U.S. farmers up to $246 per acre compared to synthetic fertilizers, as nearly 70% of farmers reported they could not afford needed fertilizer this season. The company's analysis across three key agricultural regions shows savings of $244 per acre in Kansas, $236 per acre in Louisiana, and $246 per acre in Georgia, based on current market prices for nitrogen, phosphate, and potash. Denali transforms organic materials from food businesses into agricultural nutrients, providing a stable, cost-effective option that does not depend on global supply chains disrupted by events such as shipping issues through the Strait of Hormuz. During fall 2025 and spring 2026, Denali delivered approximately $100,000 in nutrient value to a 400-acre farm in northwest Tennessee. The company also produces animal feed, compost, and biofuel from inedible food.