Southern African agriculture is entering the 2026-27 El Niño cycle with stronger foundations to manage potential climate-related disruption, despite risks from drought, heat stress, changing rainfall patterns and pressure on water resources.
El Niño is now firmly established and expected to strengthen further, with international climate forecasts pointing to a potentially very strong event. Standard Bank's latest climate risk assessments suggest the impact across Africa will vary by region, sector and level of resilience, while agriculture is expected to remain among the sectors most exposed.
“The 2026-2027 El Niño is expected to increase climate volatility across Africa, with heightened risks of drought, heat stress, food insecurity, water shortages, and infrastructure disruption, highlighting the need for early preparedness and resilience planning,” says Kelly Tucker, senior manager for Environmental, Social, and Governance Risk at Business and Commercial Banking, Standard Bank Group.
Agriculture faces heightened climate risk
Drought risk, heat stress, changing rainfall patterns and pressure on water resources could affect crop production, livestock operations and agricultural value chains across parts of Southern Africa and other regions of the continent.
"El Niño conditions have arrived and the agricultural sector will need to plan accordingly. The event itself could be significant, but Southern African agriculture is materially better prepared.
"The investments made across the sector in resilience, technology, water management and climate-smart agriculture will play an important role in determining outcomes over the months ahead," says Louis van Ravesteyn, head of agribusiness at Business and Commercial Banking, Standard Bank Group.
Southern Africa enters the potential El Niño cycle with several advantages compared with previous drought periods. These include improved dam levels following recent rainfall seasons, stronger soil moisture profiles, healthier grazing conditions, advances in seed genetics and stronger carry-over grain stocks following consecutive productive seasons.
The sector also has stronger balance sheets, improved climate intelligence, expanded irrigation capacity, climate-smart agriculture practices and more developed contingency planning than during the 2015-2017 and 2023-2024 drought periods.
Resilience extends beyond the farm
The response to climate uncertainty has also extended across the agricultural value chain, with farmers, agribusinesses, technology providers and financial institutions increasingly collaborating on solutions aimed at strengthening environmental sustainability and commercial viability.
Regenerative agriculture is one area receiving greater attention. At NAMPO Harvest Day in Bothaville, Free State, in May, Standard Bank announced a partnership with Orizon Agriculture to help eligible farming clients generate additional income through regenerative agriculture practices and participation in carbon markets.
The partnership, described by Standard Bank as South Africa's first bank-backed regenerative agriculture carbon crop credit programme, enables qualifying farmers to translate verified improvements in soil health and reductions in on-farm emissions into carbon credits, creating a potential supplementary revenue stream alongside agricultural production.
Impact will vary across agriculture
Producers that have invested in sustainable and climate-smart practices and technologies are generally expected to be better positioned to withstand adverse conditions.
Potential drought conditions could affect crop yields, livestock productivity, working capital requirements and broader agricultural value chains. Grain producers, livestock and feedlot operators, sugar producers, horticultural businesses and agricultural processors could experience varying degrees of pressure if severe drought conditions emerge.
Dryland farming systems across Southern Africa remain particularly vulnerable to El Niño-related rainfall deficits. Although the event is developing ahead of the 2026-2027 summer season, some production, supply chain and market impacts may only become fully evident during 2027.
The effects could extend beyond farms to food supply chains, logistics networks, energy security, consumer affordability and broader economic activity, with businesses and investors also monitoring potential impacts on inflation, growth and market conditions.
Standard Bank does not expect the event to create a systemic threat, but says it could expose differences in operational readiness, financial strength and adaptive capacity across sectors, geographies and value chains.
Lessons from previous droughts
Standard Bank said clients that invested in regenerative and climate-smart agriculture practices, irrigation infrastructure, dams and precision farming technologies generally performed better during the 2023-2024 El Niño cycle.
No material deterioration was observed across the bank's primary agriculture portfolio, which Standard Bank said demonstrates the value of long-term risk-mitigation investments in strengthening the sector's ability to withstand climate-related shocks.
"Agriculture has always operated in an environment of uncertainty, but today's producers have access to better information, stronger technology and more sophisticated risk-management tools than ever before. While no one can control the weather, businesses can control how prepared they are. That preparedness will play a critical role in determining how successfully the sector navigates the season ahead," says van Ravesteyn.
Nampo Cape puts resilience in focus
The outlook is among the issues being discussed at Nampo Cape, taking place from 9 to 12 September 2026, where producers, input companies, agribusinesses, financiers, equipment manufacturers and policymakers are considering the challenges facing the sector.
Water security, climate-smart agriculture, technology adoption, productivity and long-term sustainability are among the themes shaping discussions as the industry prepares for the season ahead.
Standard Bank said the focus should extend beyond the risks associated with El Niño to the progress made by the agricultural sector over the past decade.
While climate volatility remains a risk, the bank said Southern African agriculture enters the 2026-2027 cycle with stronger foundations, more sophisticated tools and greater capacity to respond than during previous drought periods.
The challenge now is to maintain that preparedness, strengthen resilience and translate lessons from previous climate events into practical action.
