With El Niño posing an intensifying threat to global food supply chains, Bank of America has identified New Zealand as the most promising market for investors seeking a hedge against the fallout.
In a note published Wednesday, BofA strategist Oliver Levingston said that historically, El Niño has triggered widespread crop losses in key exporting regions — and the current risk is amplified by elevated fertilizer prices and lingering supply-chain disruptions.
New Zealand’s outsized agricultural exposure
The bank highlighted New Zealand’s unusually heavy dependence on agricultural exports relative to other G-10 economies, arguing that a sustained shock to global food supply would likely translate into a positive terms-of-trade shock for the country.
That dynamic, BofA said, could prompt markets to begin pricing in a more favorable terms-of-trade outlook, creating upside risk for the New Zealand dollar. The bank said it expects the kiwi to appreciate sharply in such a scenario.
BofA’s analysis comes amid disruptions to fertilizer supply chains linked to developments in the Strait of Hormuz, which have compounded the pressures already weighing on global agriculture markets.
The combination of potential crop losses in major exporting regions and constrained fertilizer availability has raised concerns about the severity of food supply shocks, making hedges like the New Zealand dollar increasingly attractive to investors, according to the bank.
Source: www.cnbc.com — https://www.cnbc.com/2026/08/19/el-nino-food-supply-chain-hedge-bofa.html
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