Who Benefits From
El Niño in
South America?
The 2026–27 El Niño is becoming exceptionally strong. Argentina’s soybean and corn producers have the clearest documented upside, but Chile, southern Brazil and Peru show why the economic effects have to be read by crop, location, infrastructure and value chain rather than by country.
El Niño is often described through losses: floods, drought, crop damage, damaged infrastructure and disrupted fisheries. The 2026–27 event also creates economic advantages in specific parts of South America. Those advantages are highly uneven.
The relevant unit is rarely the whole country. A soybean producer on well-drained land in Argentina can benefit from rainfall that damages production elsewhere. A Chilean irrigation system can enter summer with more stored water while the relationship between El Niño and hydroelectric generation remains weak. Warmer seas can make tuna and mahi-mahi more available off Peru while the much larger anchoveta industry contracts sharply.
Quick answer: who benefits from El Niño in South America?
Argentina currently presents the clearest documented upside. INTA’s analysis of 35 years of crop data shows a strong historical El Niño signal for corn and first-crop soybeans, while current 2026/27 forecasts point to high production and potentially record agricultural export revenues.
Chile has a more conditional advantage. Water stored in DGA-monitored reservoirs was 26.89% higher than a year earlier on August 24. Of the 25 reservoirs monitored by DGA, 64% are primarily used for irrigation. That improves the starting position for water-dependent activity, but it does not establish a proportional gain for hydropower or the wider economy.
Southern Brazil is internally divided. Rain improved wheat conditions in parts of Paraná during July while heavier precipitation created concern in Rio Grande do Sul.
Peru shows a value shift rather than a sector-wide benefit. ENFEN expects several warm-water and oceanic species closer to the coast, and direct-human-consumption fishing increased in June. The industrial anchoveta chain, however, suffered a severe decline.
The 2026–27 El Niño is no longer a marginal climate signal
NOAA’s Climate Prediction Center reported on September 10 that El Niño was strengthening, with a probability above 90% of a very strong event during the Northern Hemisphere fall and winter of 2026–27. For October–December, NOAA assigned a 75% probability to a three-month RONI value of at least +2.5°C, a level that would exceed previous events in its record dating to 1950.
The World Meteorological Organization reached a similarly strong conclusion. Its September update described El Niño as firmly established and gave an almost 100% probability that it would persist through February 2027.
Strength alone does not determine the economic outcome. NOAA explicitly cautions that a stronger event increases the probability of typical El Niño impacts without guaranteeing them. Geography, drainage, crop calendars, reservoirs, production systems, infrastructure and market prices still determine who captures an advantage and who absorbs the loss.
A very strong El Niño can increase the size of the climate signal. It still does not create a single economic outcome for an entire country.
Argentina: the clearest potential beneficiary is corn and soybean production
Argentina provides the strongest evidence for an economic upside. INTA and CONICET’s AgroENSO platform uses 35 years of crop-yield data and removes the longer-term yield trend associated with technology and farm management. The resulting historical signal is particularly strong for corn and first-crop soybeans.
Across the 12 El Niño campaigns in the dataset, national corn yields exceeded their trend-adjusted average in 10 cases and first-crop soybean yields did so in 11. The geographical difference is substantial. In corn, only 33% of agricultural departments show a statistically significant signal. Entre Ríos has an average positive deviation of 17.1% during El Niño phases, while Villaguay and Tala reach 24% and 28%. Other production areas show little or no detectable ENSO effect.
The current starting conditions reinforce the opportunity without removing the downside. INTA reported in early September that useful soil-water reserves were around 70–80% in the area covered by its Chascomús analysis and that above-normal rainfall was expected. That creates scope for high yield potential on suitable land, while poorly drained plots face waterlogging, flooding, disease and grain-quality risk.
The Argentine advantage is therefore specific: summer crops on production land able to use additional rainfall without moving into damaging water excess.
This is consistent with Econosur’s broader Agriculture & Food Systems approach: production potential has to be read together with geography, logistics, processing and export-market conditions.
From better crop conditions to export revenue
The potential economic transmission is larger than farm yield alone. On September 22, the Buenos Aires Grain Exchange projected total 2026/27 crop production of 157.9 million tonnes. It estimated agricultural exports at US$41.497 billion, 6.9% above the previous cycle, with an agroindustrial gross product of US$54.297 billion.
The Rosario Board of Trade uses a different production framework. Based on planting intentions, projected yields for the fine-crop harvest and trend yields for corn, sunflower and sorghum, its September 18 scenario reached 155.8 million tonnes, around 10% below the current cycle. Even with lower aggregate physical output, BCR projected export revenues of US$42.2 billion, which it described as a potential historical high.
The contrast is important. A record export value does not require record physical output if crop composition and international prices move favourably. Both BCBA and BCR figures remain forecasts rather than harvested results, but they show why the 2026/27 agricultural cycle matters beyond farm production: physical output, commodity prices and export availability can move Argentina’s foreign-currency earnings simultaneously.
The historical comparison supports the direction but not a guaranteed repeat. Reuters reported that during the strong 2015/16 El Niño cycle Argentina produced 59.1 million tonnes of soybeans, the second-largest soybean harvest in the country’s history, while average corn yields were 7% above the preceding ten-year average.
A second Argentine water channel sits outside the Pampas. INTA and IANIGLA note that El Niño years can increase the probability of substantial snowfall in parts of the central and southern Andes. Snowpack can later support aquifer recharge, wetlands, groundwater and irrigation systems in arid regions.
That does not make every irrigated region a winner, but it widens the relevant El Niño exposure beyond soybeans and corn.
Chile: more stored water creates an advantage, but hydropower is not a simple winner
Chile entered the stronger phase of El Niño with a substantially improved water position. On August 24, the Dirección General de Aguas reported 6.654 billion cubic metres stored across 25 monitored reservoirs in nine regions, 26.89% more than at the end of August 2025.
The composition matters. Of the 25 reservoirs monitored by DGA, 64% are primarily used for irrigation, 16% for electricity generation, 12% for drinking water and 8% for mixed irrigation and generation. The same August 24 bulletin reported four reservoirs in the Coquimbo Region — Recoleta, Cogotí, Culimo and Corrales — at 100% of capacity and spilling.
This creates a meaningful starting advantage for irrigation-dependent production. It does not mean that El Niño itself caused the full 26.89% increase, and it does not imply that the same water automatically translates into higher hydroelectric output.
The Banco Central de Chile examined that distinction in June. Its historical analysis finds that El Niño can produce very different rainfall responses across the country and that the link between El Niño intensity and usable water for hydroelectric generation is weak and non-proportional. Its economic modelling also suggests that aggregate GDP effects can be negative even when agriculture and forestry initially receive some positive impulse.
Chile’s current benefit is better described as water availability than as an El Niño hydropower boom.
That distinction connects directly with Econosur’s Energy & Infrastructure analysis, where stored resources only create economic value when they can be delivered through the relevant physical and operating system.
Southern Brazil: the same rain can help one wheat region and hurt another
Brazil provides one of the clearest examples of why national labels are misleading. Above-average rain in July improved wheat conditions in Paraná after dry and hot conditions had raised concern in northern parts of the state. Reuters, citing Paraná’s official Deral agricultural department, reported that the rainfall was generally positive for the crop at that stage.
Rio Grande do Sul faced a different exposure. Heavier rain and wind generated concern over crop damage and field operations. The commercial implication can therefore change within the same crop and the same part of the country according to timing, rainfall volume, soil conditions and crop stage.
At national level, Conab’s July forecast does not describe Brazilian wheat as an El Niño winner. It estimated the 2026 crop at about 6 million tonnes, down 23.5%, reflecting both reduced planting area and lower expected average productivity.
Paraná versus Rio Grande do Sul shows the central problem with country-level El Niño analysis: the same climate signal can remove a water deficit in one production zone and create excess-water risk in another.
Peru: warmer-water species gain space while the anchoveta economy loses volume
Peru offers a different type of redistribution. The Ministry of Production set the first 2026 north-central anchoveta-season quota at 1,914,049 tonnes. IMARPE reported that only about 471,000 tonnes had been landed by early June, roughly one quarter of the authorised quota.
The June production statistics show how severe the interruption became. INEI reported that Peru’s fisheries production index fell 51.94% year on year. Anchoveta landings for indirect human consumption fell from 462,302 tonnes in June 2025 to just 629 tonnes in June 2026, a contraction of 99.86%.
The same INEI data also show the opposite movement inside the sector. Maritime fishing for direct human consumption increased 9.49% in June, supported by a 23.26% rise in catches for frozen products and a 5.14% increase in catches sold fresh. INEI identified higher availability of species including tuna, bonito and mahi-mahi among the contributors to those increases.
That fits the biological shift described by ENFEN. Its September 28 communiqué expects bonito and several oceanic or warm-water species, including mahi-mahi, skipjack, frigate tuna and yellowfin tuna, to become available closer to the Peruvian coast. Warm-water species are also expected to occur farther south than their usual distribution.
This is a value shift, not a net fishing-sector victory.
Fishing operators, processors and exporters able to work with warm-water species can gain access to different catches. June data already show growth in direct-human-consumption fishing. That opportunity sits beside a much larger negative shock to the anchoveta-based fishmeal and fish-oil system.
Uruguay and Paraguay: plausible benefits that still require evidence
Uruguay is an important watch case because El Niño is associated with a higher probability of above-normal rainfall during the spring and early summer. Uruguay’s Ministry of Livestock, Agriculture and Fisheries has noted that these conditions can favour some crops and floral resources while also raising access, disease and excess-moisture risks.
The economic question is whether additional rain improves pasture, crop and water conditions without crossing into flooding and production losses. That outcome should be measured in actual yields, livestock indicators and export volumes rather than assumed in advance.
Paraguay presents a similar evidence problem through river logistics. Higher navigable water levels can improve draft and barge economics, but the commercial effect depends on where water levels rise, how long they remain usable and whether flooding or downstream restrictions offset the benefit.
Econosur’s existing Paraguay River Economy and Paraná–Paraguay Waterway analyses show why water level, dredging, draft, ports and downstream access have to be assessed as one logistics system.
The emerging El Niño economic map
| Market / sector | Current mechanism | Evidence as of Sep. 30, 2026 | Main limitation |
|---|---|---|---|
| Argentina · corn & soybeans | Higher rainfall probability and strong historical yield response in relevant production areas | Strong | Flooding, drainage and major regional differences |
| Argentina · export economy | Crop mix, physical output and commodity prices could raise agricultural foreign-currency earnings | Forecast | BCBA and BCR figures remain projections and use different production assumptions |
| Chile · irrigation water | Higher reservoir storage improves available water entering the spring-summer period | Confirmed stock | Stored water cannot be attributed entirely to El Niño |
| Chile · hydropower | Higher rainfall and reservoir levels can improve generation conditions | Conditional | Central-bank evidence shows a weak, non-linear relationship |
| Brazil · Paraná wheat | Rain relieved previous dryness during crop development | Local signal | Not yet a final yield or profit result |
| Brazil · Rio Grande do Sul wheat | Heavy rain and wind increase production and field-operation risks | Negative risk | National wheat decline also reflects reduced planted area |
| Peru · direct-consumption fisheries | Warm-water and oceanic species become more available while frozen and fresh catches increase | Confirmed June shift | Does not offset the much larger anchoveta shock |
| Uruguay · agriculture | Additional rainfall could improve water and forage availability | Potential | Excess moisture and flooding can reverse the benefit |
| Paraguay · river logistics | Higher navigable levels can increase draft and barge utilisation | Potential | Requires actual navigation and water-level evidence |
Marcus A. Volz perspective
The economic value of El Niño appears where it removes an existing constraint without creating a larger one.
For Argentine corn and soybean production, the constraint can be insufficient soil moisture. Additional rainfall can raise yield potential on suitable land. Once drainage capacity is exceeded, the same water becomes a production risk.
In Chile, water stored in reservoirs can support irrigation and other users. The relevant economic question is how much of that water is usable in the right location and season. Reservoir storage alone does not establish additional hydroelectric generation or national economic growth.
Peru shows another mechanism. El Niño changes the biological composition of the marine economy. Direct-human-consumption fishing can gain volume in some categories while a much larger established anchoveta value chain loses its raw-material base.
The commercial comparison is therefore not which South American country “wins” El Niño. It is which crops, production zones, infrastructure systems and companies are positioned to convert changed rainfall, water or temperature conditions into usable economic capacity.
Three business questions that require deeper research
1. Where does El Niño remove a real production constraint?
National rainfall forecasts are insufficient. The useful analysis identifies the production basin, crop calendar, soil and drainage conditions, water availability and historical ENSO response. The same rainfall anomaly can increase output in one location and reduce it in another.
2. Which companies and value chains can capture the upside?
Additional production creates value only if storage, processing, transport, ports, buyers and export markets can absorb it. A crop-yield advantage may benefit farmers, crushers, exporters, logistics providers or downstream users differently.
3. Which apparent climate benefit fails at the infrastructure layer?
More rain, snow or river flow does not automatically become usable water, electricity or transport capacity. Reservoir limits, turbine capacity, damaged roads, port constraints, excessive river levels and processing bottlenecks can prevent the physical climate advantage from becoming commercial value.
Public climate forecasts identify exposure. They do not identify the full commercial consequence.
The next layer requires production geography, company exposure, infrastructure, logistics, buyers, suppliers, prices and actual operating data.
Researching El Niño exposure as a commercial question
Econosur can structure a focused analysis around a South American commodity, production region, company, supply chain or infrastructure system affected by El Niño.
The objective is to move from a broad climate forecast to a defined business question: where production conditions are changing, which companies are exposed, where supply may increase or tighten, which infrastructure becomes more valuable and what evidence would change a commercial decision.
Commodity Exposure
Map production regions, crop calendars, historical ENSO response, current soil and water conditions, production forecasts and export exposure.
Supply-Chain Exposure
Connect crop or resource changes with processors, storage, ports, transport systems, exporters, industrial buyers and downstream markets.
Country & Region Comparison
Compare how the same climate event affects specific regions in Argentina, Brazil, Chile, Paraguay, Uruguay, Peru or other South American markets.
Water & Infrastructure Analysis
Assess reservoirs, irrigation, hydropower, river logistics, roads, ports and other infrastructure that determines whether additional water becomes commercially useful.
Company Exposure
Identify operators, producers, processors, exporters, logistics companies or industrial users with direct exposure to changing production and water conditions.
Local Source Verification
Combine international climate data with Spanish- and Portuguese-language government, agricultural, hydrological, company and local institutional sources.
Need a specific South America climate-exposure analysis?
Econosur can examine one commodity, company, production region or supply chain and connect climate exposure with production, infrastructure, logistics and commercial implications.
Custom Market AnalysisResearch boundary
A forecast is not an outcome. NOAA and WMO can establish the probability and expected strength of El Niño. They cannot establish the final crop yield, export value or company profit in a specific South American market.
Historical correlation is not a guaranteed repeat. INTA’s AgroENSO data provide a strong historical signal for Argentine corn and first-crop soybeans. Actual 2026/27 results still depend on rainfall distribution, drainage, planting decisions, pests, disease and crop management.
Stored water is not the same as an El Niño gain. Chile’s DGA confirms current reservoir conditions. The increase cannot automatically be attributed entirely to El Niño, and reservoir volume is not identical to economically usable water or hydroelectric output.
Species availability is not sector profitability. ENFEN’s warm-water species outlook describes biological availability and distribution. It does not demonstrate that those fisheries offset the loss in Peru’s anchoveta-based industrial chain.
Country averages can hide the decisive difference. The relevant exposure can sit at province, state, river basin, crop, project or company level.
Frequently asked questions
Which South American country could benefit most economically from El Niño 2026–27?
Argentina currently has the clearest potential upside because El Niño historically improves conditions for corn and first-crop soybeans in important production areas. Current 2026/27 forecasts also point to high agricultural output and export revenues, although flooding and regional differences remain material risks.
Does El Niño benefit all Argentine agriculture?
No. INTA’s AgroENSO analysis shows the strongest historical El Niño signal in corn and first-crop soybeans and large differences between production regions. Winter crops and poorly drained areas do not share the same exposure.
Could Chile benefit from El Niño?
Chile entered the stronger phase of El Niño with significantly higher reservoir storage, which is relevant for irrigation and water availability. The economic benefit is not uniform, and Chile’s central bank finds only a weak relationship between El Niño intensity and usable water for hydroelectric generation.
Is southern Brazil an El Niño winner?
Not as a single region. Rain improved wheat conditions in parts of Paraná during July while heavier precipitation created concern in Rio Grande do Sul. Brazil’s national wheat crop was also forecast to decline substantially.
Does Peru’s fishing industry benefit from warmer water?
Some warm-water and oceanic species may become more available near the coast. That does not make the overall sector a winner because the economically important anchoveta-based fishmeal and fish-oil chain has already suffered a major decline.
Can more rainfall automatically improve hydropower and river logistics?
No. The economic effect depends on where rainfall occurs, reservoir and turbine capacity, flood risk, river levels, draft, dredging and transport infrastructure. Additional water creates value only when it remains within an operationally useful range.
How can companies assess their El Niño exposure in South America?
The useful level of analysis connects a specific commodity, production zone or company with rainfall, water, crop calendars, infrastructure, logistics, processing, buyers and export markets rather than applying one assumption to an entire country.
