Can grain stocks absorb the 2026 El Niño

In the AMIS Market Monitor for November, the FAO-AMIS forecasts for 2026/27 put world wheat stocks at 360.6 million tonnes, the highest on record, and maize stocks at 328.8 million tonnes, up from last year. Rice is moving the other way, since production falls short of consumption and closing stocks drop to 216.5 million tonnes. AMIS describes markets as relatively well supplied and adds that El Niño, which continues to strengthen, raises weather risks as the season advances. FAO's report The State of Agricultural Commodity Markets 2026 (SOCO 2026) uses a simulation to examine what would happen if a strong El Niño hit several producing regions at once, and concludes that the consequences also depend on how countries respond, meaning whether they use their stocks to keep exporting or restrict exports.

Wheat stocks are building up in Asia and the Black Sea region

World wheat production in 2026 was revised up to 819.1 million tonnes thanks to favourable weather in Türkiye and better than expected yields in Kazakhstan, Russia and Ukraine, but it remains 2.8% below the 842.5 million tonnes of 2025/26. Utilization, meaning consumption for food, feed and other uses, is put at 804.7 million tonnes, slightly below last year's record, because lower feed use in Asia and South America offsets a 0.8% increase in food consumption.

International trade for July 2026 to June 2027 is forecast at 193.2 million tonnes, below the five-year average and well below the 211.2 million tonnes of the previous season, with fewer shipments from Russia and Ukraine because of the continuing transport problems in the Black Sea. Wheat that is not exported stays in storage, so closing stocks in 2027 exceed opening stocks and reach a record, with the build-up in Asia, Russia and Ukraine.

Maize stocks recover thanks to Argentina and Ukraine

World maize production in 2026 was revised to 1,317.6 million tonnes, mainly because of better prospects in Argentina, Brazil, India and the United States. Utilization rises to 1,301.2 million tonnes, with higher demand for bioethanol in Brazil and the United States and more feed use in Asia, North Africa and Latin America. Trade is put at 208.2 million tonnes, with South American exports gaining ground on US exports thanks to competitive prices and ample supply. Closing stocks rise to 328.8 million tonnes from 322.2 last year, as large carry-in stocks in Argentina and Ukraine more than offset declines in the European Union and the United States.

Rice production falls short of consumption in 2026/27

For rice, production in 2026/27 is put at 552.0 million tonnes, slightly below the October forecast because of reduced prospects in Cambodia, Chad, Mali and Viet Nam, while utilization reaches 558.8 million tonnes, 0.6% more than last year on growing food consumption. The gap is covered from stocks, which fall from 223.9 to 216.5 million tonnes, a level AMIS still describes as high. Trade in 2027 is forecast at 61.6 million tonnes, slightly higher, with more imports by the Philippines and West African countries.

Rice was also the only one of the four AMIS commodities whose price rose in October. The rice sub-index of the International Grains Council (IGC) rose 3.7% month on month and 26.3% year on year, to its highest level since February 2025, despite seasonal harvest supplies in several Asian exporters. The sub-index summarises the export prices of the main origins, among them Thailand and Viet Nam, which are often some distance apart, as the price gap between Thai and Vietnamese rice shows.

Among the October policies recorded by AMIS, Viet Nam has required rice traders since 1 October, under Decree 365/2026, to hold minimum stocks equal to 5% of the volume they exported in the previous six months. The Philippines announced on 5 October PHP 6.2 billion, about USD 100 million, from the UPLIFT programme for farmers hit by El Niño, and on 26 October raised the quantity of maize imported in 2026 at the preferential 5% tariff from 220,000 to 500,000 tonnes.

Soybean stocks fall despite steady production

Soybean production in 2026/27 stays at 441.1 million tonnes, with better yields in the United States and lower forecasts for the European Union and Ukraine. Utilization, however, rises to 446.0 million tonnes, with more crushing in North and South America and in Viet Nam, and exceeds production. Stocks fall to 67.9 million tonnes from 71.2 last year, mainly because China's opening stocks were revised down.

Almost half of the world's grain stocks are in China

Excluding China, wheat stocks in 2026/27 fall to 203.2 million tonnes, according to the totals that AMIS publishes separately. The difference, about 157 million tonnes or 43.6% of world stocks, is in China. In maize China's share reaches 47.3% and in rice 48.2%. Relative to annual utilization, world wheat stocks correspond to 44.8%, and to 30.5% excluding China. For maize the corresponding ratios are 25.3% and 17.5%, and for rice 38.7% and 27.0%.

Commodity	Production	Utilization	Stocks	Stocks excluding China
Wheat	819.1	804.7	360.6	203.2
Maize	1,317.6	1,301.2	328.8	173.4
Rice	552.0	558.8	216.5	112.1
Soybeans	441.1	446.0	67.9	32.9

Million tonnes, 2026/27 season. Source: AMIS Market Monitor No. 143, November 2026, FAO-AMIS forecasts of 6 November

October prices fell for every commodity except rice

The IGC Grains and Oilseeds Index (GOI) closed October at 242.0 points, 4.1% lower than in September and 10.5% higher than a year earlier. Wheat fell 6.1% to a three-month low despite the continuing shipping problems in the Black Sea, as the market expects progress in the Russia-Ukraine peace talks and large southern hemisphere harvests. Maize fell 6.5%, close to a four-month low, after the three-year high at the end of September, and soybeans fell 4.1%, with declines across all major origins. Year on year, wheat remains 10.0% and soybeans 12.0% more expensive, while maize is 0.4% below last year's levels. The first estimates of this event's effects on food prices were presented in June, in the article on El Niño, crops and food prices, before the October decline.

FAO examined an El Niño-type shock in several regions at once

The second scenario of SOCO 2026, the "global food system shock", is based on a 2015 Lloyd's report that describes a plausible combination of extreme weather events during a strong warm phase of the El Niño-Southern Oscillation (ENSO), meaning a strong El Niño. In the scenario, floods in the United States cut the maize harvest by 27% and wheat by 7%, droughts and torrential rain with floods and landslides hit rice and wheat in Asia, drought halves Australia's wheat production and the Ug99 race of wheat stem rust is carried by the wind to India, Kazakhstan, Pakistan, Russia, Türkiye and Ukraine. World maize production falls by 10% and rice and wheat production by 7% each. FAO puts the probability of such a combination at greater than 1 in 200 years.

Because the damage hits many large producers at the same time, 55% of bilateral trade flows in rice, 37% in wheat and about 32% in maize are disrupted, and world cereal prices rise by 70%. Import-dependent countries, regardless of income, and countries of the global South are the most exposed.

Russia, Ukraine, Kazakhstan and Türkiye, which lose wheat to stem rust in the scenario, had better than expected yields or favourable weather in 2026, and the forecast for US maize was revised up, so developments so far are far from the scenario. AMIS nevertheless warns that El Niño conditions are expected to last through April 2027 with a 98% probability, and that the positive phase of the Indian Ocean Dipole usually adds to the drought El Niño brings to Australia and the islands of maritime Southeast Asia. The regions where El Niño usually brings drought or extra rain are known from past events.

How stocks are used changes the number of undernourished people

In the baseline scenario all countries cooperate and release up to 50% of their domestic cereal stocks to replace lost imports and keep exporting to their trading partners. Even so, the shock adds 163.8 million people to the undernourished. FAO then examined three variations in country behaviour.

When stocks are also used to open new trade flows to the countries that lost their suppliers, the number of additional undernourished people falls to 162.5 million. The situation improves in 35 countries and only two are slightly worse off, by about 2 calories per person per day. When countries use stocks only to cover their own imports and stop exporting, shortages cascade, the additional undernourished reach 171.3 million and calorie availability worsens in 101 countries.

In the third variation, which simulates short-term panic, large exporters, even those not directly hit, restrict cereal exports to 75% of their pre-shock volume. The additional undernourished then reach 185.2 million, 21.4 million more than in the baseline, and food security worsens in 120 countries, with none gaining, not even those that imposed the restrictions. According to FAO, insulating a market with trade restrictions does not fully protect it from the shock, while weakening global markets increases everyone's vulnerability.

How countries respond	Additional undernourished (millions)	Countries worse off than in the baseline
Baseline, release of up to 50% of stocks	163.8	reference
Enhanced cooperation with new trade flows	162.5	2, with 35 better off
Stocks used only for own imports	171.3	101
Exports restricted to 75% of volume	185.2	120

Hypothetical scenario of a simultaneous shock in several producing regions. Source: FAO, The State of Agricultural Commodity Markets 2026, pp. 34 and 35

Export restrictions raise international prices for everyone

When large exporters restrict exports and large importers cut tariffs to hold down domestic prices, supply on the international market shrinks just as demand rises. FAO notes that the market thereby loses its ability to spread the shock across many countries, and that higher prices push other countries into the same measures, a mechanism the report calls a multiplier effect. An analysis of the trade measures of 77 countries for 32 products from 2008 to 2011 found evidence of this mechanism, and another study of the same period estimates that a 20% increase in trade restrictions worldwide raised food prices by 22% to 56%.

In the 2007/08 price crisis, export restrictions covered more than 16% of internationally traded calories, and in the first months of the COVID-19 pandemic about 8%. According to the estimates FAO cites, policies insulating domestic markets explain 45% of the rise in the international rice price in 2007/08 and about 30% of the rise in the wheat price.

In Tanzania, maize export bans would push 210,000 rural households below the poverty line in maize-surplus areas compared with free exports, according to an estimate FAO cites. Restrictions lower domestic prices and benefit consumers, but they act as a tax on producers, reduce the incentive to produce and invest and, in the long run, harm the country's own food security.

Exporters and importers responded differently to past droughts

In South Africa, a traditional maize exporter, the drought of the 2015/16 El Niño, one of the worst in recent decades, hit the maize-growing provinces. Exports fell sharply and the country temporarily considered imports, while with the 2021/22 harvest, after favourable rains, exports to neighbouring countries in southern Africa increased.

In Viet Nam, a large rice exporter, the extreme drought of the 2015/16 El Niño, the country's worst in 90 years, together with saltwater intrusion, sharply reduced the exportable surplus. Despite heavy losses, the country did not impose formal quantitative restrictions on rice exports, unlike in 2007/08, when, after floods and typhoons, it restricted exports during the international price crisis.

In Honduras, a net food importer where maize is the staple food, the government allowed larger duty-free maize purchases from outside Central America after the drought of the 2014/15 El Niño. Imports rose again in 2023/24 with the droughts and storms linked to El Niño.

In Morocco, which depends heavily on wheat imports, the extreme drought of 2015/16 cut wheat production by more than 50% from the previous year and imports doubled. The tariff on soft wheat was cut from 50% to 30% and raised again to 65% when conditions normalised.

In Australia, wheat exports from 2007 to 2024 followed droughts and La Niña and El Niño events. The droughts of 2007/08 and 2017 to 2019 reduced yields and exports, while the La Niña years of 2010/11 and 2021/22 brought above-average rain and larger exports, often with lower grain quality because of excess moisture and disease.

Governments hold three kinds of public stocks

Distribution stocks are linked to social protection and reach poor households in kind or through shops with subsidised prices. Emergency stocks are released on the market to increase availability and soften sharp price rises, usually correspond to one or more months of national consumption and are not aimed at stabilising prices or incomes. Buffer stocks keep the price within a band, with a floor price that supports producers and a ceiling that protects consumers, and the state buys or sells so that the price stays within it.

The cost of buffer stocks shows in India, where the Food Corporation of India bought quantities of rice and wheat equal to 30% of domestic production from 2019 to 2024, at a cost of USD 35 billion in 2022/23, about 1% of GDP, and one study puts the cost of such programmes in India, Indonesia, the Philippines and Zambia at between 0.5% and 1.5% of GDP. Switzerland keeps emergency stocks equal to four months of national cereal consumption, and Norway created a stock of 15,000 tonnes of cereals in 2024. In both countries the stocks are held by the private sector with subsidies and released at market prices when needed. In October Russia approved a draft decision on subsidies of over RUB 5 billion, about USD 60.3 million, for maintaining the grain stocks of the federal intervention fund, according to AMIS.

FAO concludes that large buffer stocks have proven very expensive, fiscally unsustainable and market-distorting, while emergency stocks combined with targeted social protection measures, such as cash transfers and food assistance, protect vulnerable populations more effectively in crises.

Southern hemisphere harvests and exporters' decisions will be decided by March

According to NOAA's Climate Prediction Center, El Niño will strengthen further before it begins to weaken in early 2027, and its effects on rainfall continue after the peak, so by March it will be clear for each commodity whether stocks are enough.

Wheat: stocks are at a record, but 43.6% are in China and trade depends on Black Sea shipping.
Maize: the recovery in stocks rests on Argentina and Ukraine, and the South American crop now being sown will show whether its exports stay high.
Rice: production falls short of consumption, prices are at their highest since February 2025 and Asian exporters are already taking measures on traders' stocks.
Policies: in the FAO scenario, export restrictions by countries not directly hit add more undernourished people than any other response.

Frequently asked questions

Are grain stocks enough to cover a strong El Niño? For wheat and maize, 2026/27 stocks are high, with wheat at a record 360.6 million tonnes. Almost half of them, however, are in China, and rice stocks are falling. FAO's simulation shows that the outcome also depends on whether countries keep exporting.

Which grain is most exposed in 2026/27? Rice. Its production, 552.0 million tonnes, falls short of utilization, 558.8 million tonnes, stocks are falling and the IGC price sub-index was 26.3% higher in October than a year earlier.

How much do export restrictions add to hunger? In FAO's scenario of a simultaneous shock in several regions, restricting exports to 75% of volume adds 21.4 million undernourished people to the 163.8 million of the baseline and worsens the situation in 120 countries.

What is the difference between buffer stocks and emergency stocks? Buffer stocks keep the price within a band through state purchases and sales. Emergency stocks usually cover one or more months of consumption and are released only to increase availability in a crisis.

Have grain prices risen because of El Niño? In October international prices of wheat, maize and soybeans fell, and only rice rose. Year on year, wheat was 10.0% and soybeans 12.0% more expensive.

Is the FAO scenario a forecast for 2026? No. It is a hypothetical scenario, inspired by a 2015 Lloyd's report, with a probability FAO puts at greater than 1 in 200 years. Up to November the large wheat and maize exporters had good harvests.

Important notes

The balances in the article are FAO-AMIS forecasts of 6 November 2026 and are revised every month, with the next AMIS Market Monitor on 4 December. China's shares and the stocks-to-use ratios are Wikifarmer calculations from the world totals and the totals excluding China that AMIS publishes. The SOCO 2026 scenarios are simulations with hypothetical shocks and do not describe the course of this year's El Niño.