Goldman Sees Southeast Asia Food Shock Adding 2.1 Points to Inflation as El Niño Threatens
Updated
Updated · CNBC · Jun 22
Goldman Sees Southeast Asia Food Shock Adding 2.1 Points to Inflation as El Niño Threatens
3 articles · Updated · CNBC · Jun 22
Summary
Goldman Sachs estimates oil, fertilizer and weather shocks will add 1 percentage point to Southeast Asia’s food inflation after six months, rising to 2.1 points after 12 months before easing slightly.
Higher oil and fertilizer prices tied to the Middle East conflict are already feeding into fuel-sensitive consumer prices, and Goldman says a strong El Niño in late 2026 could trigger another supply shock as those costs move through the food chain.
Singapore and the Philippines are seen as most directly exposed because they are net food importers, while Thailand is vulnerable because more than 90% of its fertilizers are imported.
Malaysia and Indonesia look more insulated because of palm oil, but Goldman said both become net food importers if that sector is excluded, leaving much of the region exposed to global food-price swings.
OECD and LSE research cited in the report suggests prolonged oil disruptions and fuel shortages from the Iran war could lift fertilizer costs, disrupt planting and harvesting in 2026-27, and reduce crop yields.
Goldman Sachs warns that Southeast Asia, especially Thailand, faces an immediate threat of food inflation in 2026 due to its heavy reliance on imported agricultural inputs. Thailand imports over 90% of its fertilizers, making it highly vulnerable to global price fluctuations and supply chain disruptions. When international fertilizer costs rise, domestic food input prices in Thailand increase, leading to higher consumer food prices. This dependence exposes Thailand and similar countries in the region to global food-price shocks, creating significant risks for food price stability and household purchasing power throughout 2026.