Weather risks from possible El Nino and global tensions could pressure inflation in 2026: SBI report

Group 1: Weather Patterns and Inflation - The report by State Bank of India indicates that weather patterns and geopolitical risks could negatively impact inflation in 2026, particularly due to a potential build-up of El Nino [1] - The Nino 3.4 Sea Surface Temperature Index shows that the El Nino-Southern Oscillation is currently neutral but may shift to a positive phase in 2026 [2] - The Indian monsoon is affected by both ENSO and the Indian Ocean Dipole (IOD), with a negative IOD typically leading to a deficient monsoon [2][3] Group 2: Geopolitical Risks and Commodity Markets - Ongoing geopolitical conflicts have led to a near shutdown of maritime trade, disrupting production and causing oil to be held on water due to inadequate storage capacity [4] - The disruption in commodity markets has intensified speculation and reflects genuine demand from various regions [5] - The report emphasizes the need for communication and coordinated action to address the current global environment and suggests alternative energy security arrangements [5]