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Aug. 26 (UPI) — El Salvador and Panama have declared their highest-level alerts nationwide as the effects of El Niño threaten economies and residents’ safety.

In Panama, the climate phenomenon already has brought torrential rains and severe flooding to northern and Caribbean areas, affecting more than 15,600 people.

In El Salvador, it has triggered extreme agricultural drought and unprecedented heat that destroyed 20% of basic grain crops, seriously threatening the country’s food security.

In contrast, Panama’s metropolitan and central regions are facing a rainfall deficit that could persist at least through March, according to forecasts from Panama’s Institute of Meteorology and Hydrology.

Eleven watersheds already are experiencing “water stress,” with the effects expected to persist through May, along with elevated temperatures, Infobae reported. The situation has prompted the Panama Canal Authority to impose preventive restrictions on vessel traffic because of low water levels.

El Niño is a natural climate phenomenon marked by warmer-than-normal surface waters in the central and eastern equatorial Pacific, causing shifts in global wind and rainfall patterns, as well as erratic weather conditions.

The U.S. National Oceanic and Atmospheric Administration issued a historic forecast this month, warning that the current El Niño has a greater than 90% chance of becoming a “very strong” event.

The agency’s official models indicate a nearly 70% chance that it will surpass all events recorded since 1950 in intensity, exceeding the record set by the massive 1982-83 event.

Panama’s Government Minister Dinoska Montalvo said Tuesday the state of emergency was declared to streamline administrative procedures, strengthen operational capacity and prepare “for what is to come,” the Panamanian newspaper La Estrella de Panamá reported.

According to El Salvador’s Environment Ministry, the country is experiencing its third consecutive drought period during the current rainy season, with the eastern and coastal regions hardest hit, the news outlet elsalvador.com reported.

The government declared a nationwide red alert Tuesday because of the risk that the drought could threaten people’s livelihoods and food security.

The Environment and Natural Resources Ministry expects estimated rainfall from August through October to total only about .24 inch, compared with a normal average of 37 millimeters during that period, La Prensa Gráfica reported.

In July, El Salvador experienced a heat wave that pushed temperatures above 104 degrees-F in the country’s eastern and central regions for 12 consecutive days, representing a severe anomaly.

Although those areas are accustomed to hot weather, regular rainfall during the country’s rainy season typically acts as a natural temperature regulator, keeping average highs closer to 91 degrees.

The waters far away from El Niño’s Pacific hunting ground are also extremely warm, including around the UK and Europe.

The western English Channel has seen almost continuous marine heatwave conditions for more than three years, peaking at 7C above normal in July, according to Prof Tim Smyth, director of science at Plymouth Marine Laboratory.

“This is unprecedented,” he added.

Scientists say such widespread warmth around the planet is a clear sign of the growing effect that human-caused climate change is having on the world’s seas.

The oceans take up more than 90% of the excess heat trapped by humanity’s greenhouse gas emissions, mainly from burning fossil fuels.

“The latest Copernicus data reinforce the troubling upward trend in ocean temperatures,” said Smyth.

Warmer seas help to fuel more extreme weather. They can provide storms with extra moisture and energy, and can intensify heatwaves on land in some coastal regions by reducing the cooling effect of sea breezes.

Warmer water also takes up more space, raising sea levels and bringing a greater risk of coastal flooding – while intense ocean heat can be devastating for sea habitats, such as coral reefs.

The increasing frequency of marine heatwaves is already “putting increasing pressure on marine ecosystems and the communities that depend on them”, Burgess said.

Met Office predicts ‘unprecedented’ sea surface temperature rise of 3C (5.4F) plus will heighten extreme weather risks.

The impact of this year’s El Nino event is expected to be the most intense in more than a century, United Kingdom forecasters have warned.

The effect of the event will drive the risk of drought, high temperatures, intense rainfall and other extreme weather effects, the Met Office said in a statement issued on Friday.

Typically, El Nino leads sea surface temperatures to rise between 1-2 degrees Celsius (1.8-3.6 degrees Fahrenheit). However, forecasts for the 2026 version predict record values of more than 3C (5.4F) in the coming months, the forecasters said.

“We should be clear that this is an unprecedented event,” said Adam Scaife, head of the office’s long-range forecasting. “I have never seen an El Nino signal this intense in our forecasts.”

If the spike plays out as anticipated, “then 2026 will far exceed our recent experience of El Nino and its worldwide climate influences”, he added.

The chief forecaster separately told the BBC that the three-degree rise was “unheard-of in modern climate records”.

El Nino is triggered by unusually warm sea surface temperatures in the central and eastern tropical Pacific Ocean, influencing global weather patterns.

Governments around the world are already grappling with historic climate events so far this year.

Wildfires have burned through more than 200,000 hectares (494,200 acres) in Indonesia and rampaged across southwestern Europe, forcing the displacement of at least 325,000 people in Spain and France. Other countries are dealing with severe droughts.

The Met Office said El Nino will spawn wetter, stormier conditions in northwestern Europe, including the UK, as autumn and winter arrive in the Northern Hemisphere.

Particularly strong effects are expected throughout the Tropics, Scaife said, “where we expect really severe droughts in places like South America, and the West Pacific”.

In mid-August, the UK recorded its hottest day of the year as the temperature in west London climbed to 38.1C (100.5F), beating the previous high of 38C (100.4F) in June.

Combined with the effects of human-induced climate change, the Met Office warned that the event is “very likely” to make 2027 the hottest year on record globally.

The El Nino weather phenomenon is expected to increase the likelihood of drought and excess heat across the region.

The Panama Canal is expected to limit traffic starting in early September, as it prepares for lower water levels due to the El Nino weather phenomenon.

On Thursday, the Panama Canal Authority, the body that oversees the waterway, announced that daily transit caps would be set to address concerns about the drier weather conditions ahead.

Under the new measures, 34 vessels will be permitted to sail through the canal as of September 4. A further reduction will start on September 15, when the limit will be 32 ships.

The travel restrictions are a reversal for the Panama Canal Authority. Officials told the news service Reuters in May that they had no plans to limit crossings this year, citing water conservation measures imposed last year.

The canal, which handles about 5 percent of global maritime trade, usually has capacity to accommodate about 40 vessels per day.  Since June, it has seen a daily average of 35 transits.

Any significant decrease in travel through the canal is likely to translate into slower international shipping for industries that rely on the waterway. That, in turn, could increase costs.

A severe drought in 2023, for instance, cut traffic through the Panama Canal by roughly 36 percent, leading to disruptions in global supply chains.

The declining water levels that year were also attributed to El Nino, as well as climate change accelerated by human activities.

El Nino is a naturally occurring weather phenomenon that takes place every two to seven years, when the eastern tropical Pacific Ocean is warmer than usual.

The resulting weather patterns can have an impact across the region and even globally, putting some areas at risk of excessive heat and drought, while others suffer from flooding

Scientists expect a particularly strong El Nino in the coming months, potentially among the strongest on record. That could lead to an increase in cases of extreme weather events.

Panama Canal authorities have previously imposed vessel limits in order to conserve water.

The canal relies on a lock system that lifts and lowers vessels as they travel from the Pacific Ocean to the Caribbean Sea, and vice versa.

But the canal is fed, in part, by freshwater from nearby lakes and reservoirs, most notably Gatun Lake.

Panamanians rely on that lake as well to supply drinking water to nearby cities, including the capital Panama City, putting additional strain on the waterway during times of drought.

A potentially very strong El Niño is emerging as a major risk for global agricultural markets, threatening to disrupt rainfall, raise temperatures and expose some of the world’s most important tropical crops to severe weather stress.

The U.S. Climate Prediction Center now sees a greater than 90% chance of a very strong El Niño during the northern hemisphere autumn and winter of 2026 to 2027. For commodity markets, the concern is not simply that El Niño causes drought. Its effects vary sharply by region, meaning excessive rainfall in one major producing country can occur alongside extreme dryness in another.

That makes the phenomenon particularly important for soft commodities such as cocoa, coffee and sugar, whose production is concentrated in climate sensitive tropical regions.

Why El Niño matters for commodity markets

El Niño occurs when sea surface temperatures in the eastern Pacific become unusually warm as trade winds weaken. The pattern generally lasts between nine and 12 months and can alter global temperature and rainfall patterns.

For farmers, the problem is timing. Crops can be damaged not only by drought but also by excessive rainfall, heat, fungal disease and disrupted flowering or harvesting cycles.

This year’s potential El Niño also arrives at an unusually difficult moment for agricultural producers. Farmers are already dealing with higher fertiliser and diesel costs linked to the U.S. Israeli war on Iran. Another major weather shock could therefore amplify existing production pressures.

Historically, strong El Niño episodes have been associated with substantial increases in soft commodity prices. But the effects differ considerably between crops.

Cocoa faces one of the clearest risks

Cocoa appears particularly vulnerable because production is heavily concentrated in a relatively small number of countries.

Ivory Coast and Ghana together account for roughly half of global cocoa production, while Ecuador is the third largest producer. All three can experience significant El Niño related weather disruptions.

Every strong El Niño over the past 55 years has reduced cocoa output, according to WisdomTree.

The previous El Niño illustrates why the relationship is more complicated than simply associating the phenomenon with drought. During the initial phase of the 2023 to 2024 event, West Africa experienced unusually heavy rainfall. Excess moisture contributed to fungal disease affecting cocoa trees.

Conditions subsequently shifted toward intense heat and unusually dry Harmattan winds. Trees weakened by disease struggled to flower, further damaging production.

That sequence demonstrates the real danger for cocoa: El Niño can produce multiple weather shocks during the same crop cycle.

The consequences can quickly reach global consumers. Cocoa prices nearly tripled in 2024 after the West African harvest failed, eventually exceeding $12,000 per metric ton.

A very strong El Niño could therefore revive fears of another supply deficit if weather conditions deteriorate across major growing regions.

Coffee faces a divided outlook

Coffee presents a more complicated picture because the world’s two major varieties are concentrated in different regions.

Robusta coffee is particularly exposed to El Niño because Vietnam and Indonesia, which together account for about half of global robusta production, typically experience higher temperatures and reduced rainfall under the weather pattern.

The timing is especially important. Dry conditions can hit these countries during crop development, with the consequences becoming visible during harvesting later in the year.

Citi analysts warned that dryness in Vietnam and Indonesia could significantly reduce robusta yields.

Arabica coffee presents a different picture.

Brazil, responsible for nearly half of global arabica production, can initially benefit from warmer conditions because they reduce the risk of damaging winter frosts.

But that advantage could prove temporary. El Niño typically brings hotter and drier conditions to Brazilian coffee growing regions later in the year, when the next crop is developing.

That creates the possibility of a delayed supply shock in 2027.

Sugar could be the exception

Sugar demonstrates why El Niño does not automatically translate into a bullish commodity market.

Brazil, the world’s largest sugar exporter, can experience heavier rainfall during the second half of the year. Excessive rain can disrupt harvesting and affect sugar quality.

India and Thailand face the opposite problem. El Niño generally reduces rainfall during the summer monsoon, creating additional pressure on production.

India is already expecting its lowest monsoon rainfall in 11 years, at around 90% of the long-term average. Hedgepoint estimates that even a moderate El Niño could reduce Indian sugar production by around 1 million metric tons.

Yet there is an important counterweight.

El Niño’s wetter conditions in Brazil could ultimately support the country’s following sugar crop. Since Brazil accounts for roughly half of global sugar exports, stronger Brazilian production could offset losses elsewhere.

That means sugar may not experience the same sustained price pressure as cocoa or robusta coffee.

The bigger problem is climate uncertainty

The most important market implication is not simply whether El Niño becomes “very strong.” It is where its effects materialise and when.

Agricultural markets operate on highly specific growing cycles. Rain arriving at the wrong stage can be just as damaging as drought. Excessive rainfall can create disease, while heat can interfere with flowering and crop development.

Climate change further complicates the picture.

The relationship between El Niño and agricultural weather is becoming harder to interpret because rising global temperatures can intensify the consequences of existing climate patterns. A weather event that might previously have produced manageable stress can now occur against a much hotter baseline.

This means commodity traders increasingly have to price not just the probability of El Niño, but the interaction between El Niño, climate change and already strained agricultural supply chains.

What could happen to prices?

The clearest risk is concentrated in cocoa and robusta coffee, where production is particularly exposed to adverse conditions in major growing countries.

Cocoa has perhaps the greatest vulnerability because West Africa dominates global supply and has already experienced serious weather related production problems. Another major disruption could quickly tighten inventories and push prices higher.

Robusta coffee faces a similar risk if drought develops across Vietnam and Indonesia.

Sugar is more balanced. Production losses in India and Thailand could be partly or potentially substantially offset by improved Brazilian conditions for the following crop.

The broader lesson is that El Niño is not a uniform commodity shock. It redistributes weather risks across producing regions, creating winners and losers within the same market.

Why consumers should care

The effects will ultimately extend beyond commodity exchanges.

Higher cocoa prices can increase chocolate production costs. Coffee shortages can raise prices for roasters and consumers, while sugar disruptions can affect everything from beverages to processed foods.

And because agricultural markets are interconnected, a weather shock in one producing region can encourage buyers to compete more aggressively for supplies elsewhere.

The potential super El Niño therefore arrives at a particularly sensitive moment for global food markets.

If forecasts prove correct, the next several months could test whether commodity markets have adequately priced the risks of increasingly volatile weather.

The real threat is not El Niño alone. It is El Niño hitting an agricultural system already under pressure from rising costs, concentrated production and a changing climate.

With information from Reuters.