El Niño 2026-27: 81% chance of very strong event and what it means for Brazil's economy

On July 9, NOAA updated its El Niño 2026-27 forecast to 81% chance of reaching very strong category between October and December. In June, it was 63%. The jump was nearly 20 percentage points in one month.

The El Niño Panel 2026-27, produced by INPE, INMET, CEMADEN, ANA, SGB and the National Civil Defense, confirmed the phenomenon and projected over 90% chance of persistence until early 2027, with high probability of very strong intensity in spring and summer (Cemaden/MCTI, Jun 30, updated Jul 8, 2026). Six independent Brazilian scientific institutions aligned on the diagnosis.

Sea surface temperature in the Niño 3.4 region (central equatorial Pacific) jumped from +0.4°C in May to +1.2°C in July. Off the coast of South America (Niño 1+2), the anomaly reaches +2.7°C. Ocean and atmosphere remain coupled, reinforcing the system (CPC/NOAA, Jul 8-9, 2026).

The 2026 El Niño could rank among the strongest since 1950, alongside 1982-83, 1997-98 and 2015-16.

What to expect by region

Brazil experiences regional impacts that follow predictable patterns.

South: Rainfall well above average in the third quarter, with risk of storms, floods and landslides. Waterlogged soil hurts winter cereal harvests. The El Niño Panel confirms this pattern in seasonal forecasts (El Niño Panel Bulletin #1, Jun/2026).

North: Drought, extreme heat, wildfires. Low river levels threaten navigation in the Northern Arc. The Tapajós River may fall 0.9 meters below normal (Santander, Jun/2026). It carries 36.2% of Brazil's soybean and corn exports. The Panel points to below-average rainfall in the center-north.

Northeast: Dry spell impacts rain-fed agriculture and livestock. The Panel forecasts significant rainfall reduction, especially in the semi-arid region.

Center-West: Delayed rains compress the planting window. The second corn crop, which represents 75% of national production, is at risk. High temperatures and dry spells increase water stress on pastures and the next season (El Niño Panel Bulletin #1).

Southeast: Irregular rainfall, above-average heat and pressure on reservoirs of the National Interconnected System. Heat waves raise energy demand and accelerate the shift to more expensive tariff flags.

Four sectors in focus

Agriculture: The 2025/26 harvest was estimated at 358.6 million tons by Conab, after 11.7% growth in 2025. The risk is asymmetric regional losses. Economist Felippe Serigati of FGV Agro notes that crop losses reverberate into the following year (Veja, Jul/2026).

Crop insurance, which should offset losses, is shrinking: policies fell from 82,000 (2021) to 26,000 (2025). The government blocked R$ 461.7 million from the Rural Insurance Subsidy Program (Poder360, Jun 10, 2026).

Power sector: TI Safe estimates R$ 35 billion in potential losses for the 25 largest Brazilian power sector groups with a moderate to strong El Niño (Porto e Navios, Jul 5, 2026). Hydroelectric plants face combined risk of extreme heat and irregular river flows. The yellow tariff adds R$ 18.85/MWh; the red one, R$ 44.63/MWh.

Logistics and ports: The Northern Arc handles over one-third of grain exports and depends on waterways sensitive to river levels. With the Tapajós 0.9m below normal, navigability drops. In the South, excessive rain threatens roads and terminals (Transporte Moderno, Jul 6, 2026).

Macroeconomy and inflation: Brazil's Central Bank projects 0.3 percentage points added to IPCA in 2026 and 0.4 points in 2027 due to El Niño (Veja, Jul/2026). G5 Partners forecasts up to 8% food price increase by year-end.

What the ECMWF changed (and why it matters)

Since June 1, the European Centre (ECMWF) adopted a relative warming index for El Niño projections. Instead of measuring only the absolute Niño 3.4 temperature, it compares the warming of that region with the rest of the tropics. This reduced ECMWF forecasts by about 0.5°C versus traditional measurements. All American, European, Australian and Brazilian models indicate a strong to very strong event between spring 2026 and summer 2027.

Where data becomes decision

The first Joint Technical Note was issued in April 2026, seven months before the expected peak. The government El Niño Panel, launched in June, has already published its second edition in July. The alert has been available since autumn.

Those monitoring critical assets (ports, power plants, mines, railroads, transmission lines) have data with defined lead time and resolution. The cost of not using it is high. The difference between an El Niño that makes the news and one that becomes a management variable lies in what is done in the next 90 to 120 days.

Anticipating by weeks costs less than reacting by hours. The data exists. The missing piece is turning it into planning.