A record-strength El Niño is forming, and Barclays expects it to push food and industrial raw material prices sharply higher over the next year and a half — bad news for anyone worried about inflation, good for commodity investors.

• Palm oil, coconut oil and natural rubber could jump 30-40% within 18 months because their growing areas are packed into Southeast Asia.
• The El Niño reading in the tropical Pacific may peak near the end of 2026 at a level about 15% stronger than the record 2015-16 event.
• Coffee could rise 20-30% and rice 10-20% as drought and water shortages hit Southeast Asia and parts of Central America.
• The damage spreads past farming: copper and aluminium may gain up to 20% and thermal coal 20-40%, since drought cuts hydro power, raises electricity costs and disrupts mines and ports.
• Commodity markets are already moving — a broad commodity index is up more than 22% since late June, and former Goldman strategist Jeff Currie says the era of abundance is likely over.

Outlook: If the forecasts hold, food and raw material costs climb through 2027, feeding back into inflation just as central banks hoped it was under control.