Marex CEO warns markets may underestimate El Nino risks

Investing.com -- Global financial markets may not be properly pricing in the potential impacts of a very strong El Nino weather event, according to Marex Solutions CEO Nilesh Jethwa, who spoke on Thursday.

The executive said a proper evaluation of El Nino has been prevented as the financial sector focuses on the Middle East conflict and technology sector valuations.

Jethwa told clients in a note that volatility could increase significantly if weather disruption combines with concentrated supply, low inventories, or restrictive trade policy.

The CEO pointed to rice and cocoa as examples of concentrated supply that could be affected by a very strong El Nino.

Trade flow restrictions, with governments moving to limit exports to secure local supplies, would also affect prices for some commodities, Jethwa said.

The U.S. Climate Prediction Center said there is an 81% chance that the current El Nino will continue into 2027 and would be a very strong event.

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