Investors should begin positioning in sectors that could benefit from a potential "Super El Niño" weather pattern, as climate forecasters warn that intensifying heat and drought later this year may reshape demand across agriculture, energy and consumer industries, according to analysts.

The investment theme comes as the US National Oceanic and Atmospheric Administration (NOAA) declared the return of an El Niño on June 11. NOAA estimates a 63% probability that weather conditions could strengthen to a Super El Niño between November 2026 and January 2027, raising the likelihood of prolonged heatwaves and below-average rainfall across many regions, including Thailand.

For investors, the phenomenon is increasingly viewed not only as a climate risk but also as a structural investment theme, as extreme weather alters commodity prices, electricity demand and consumer spending patterns.

Piriyapon Kongvanich, head of equity research at Bualuang Securities (BLS), said previous Super El Niño episodes in 1982-83, 1997-98 and 2015-16 brought significantly drier conditions to Thailand.

Annual rainfall during those periods averaged 1,446 millimeters, roughly 9.4% below the country's 40-year average of 1,596mm, while peak temperatures climbed to 41°C, about two degrees higher than normal.

Such conditions increase drought risks and put pressure on agricultural production and water supplies, but also create earnings opportunities for selected industries.

KEY BENEFICIARIES

BLS projects livestock producers, particularly pork-related businesses, as beneficiaries of higher temperatures, which reduce animal productivity and tighten supply.

Heat stress causes pigs to consume less feed, grow more slowly and become more susceptible to disease, limiting pork production. Because hog production requires 9-12 months, supply cannot respond quickly to stronger prices.

Broiler chickens, by contrast, require only around 42 days to raise, allowing producers to increase output much faster.

Historical data from 2004 and 2023 show that pork prices rose by an average of 17% during El Niño periods, compared with an average increase of around 12% for chicken prices.

BLS recommends Betagro (BTG), Thai Foods Group (TFG) and Charoen Pokphand Foods (CPF), which could benefit from firmer pork prices if supply tightens.

The brokerage also expects beverage makers and convenience store operators to enjoy stronger sales as prolonged heat encourages higher consumption of ready-to-drink products, suggesting Ichitan Group (ICHI), Carabao Group (CBG), Osotspa (OSP) and convenience store operator CP All (CPALL) as potential beneficiaries.

RISING ENERGY DEMAND

Sittichai Duangrattanachaya, head of investment strategy at InnovestX Securities, said he predicts traditional energy and natural gas producers will benefit from hotter weather.

Higher temperatures typically lift electricity demand for air conditioning, while drought reduces water levels available for hydropower generation. This would prompt utilities to rely more heavily on natural gas and coal-fired generation to maintain electricity supply, noted the brokerage.

InnovestX identified liquefied natural gas firms among the companies positioned to benefit from stronger demand for conventional fuels. Agricultural commodity traders will likely gain from rising crop prices caused by drought-related supply disruptions. Fertiliser producers may also benefit as farmers seek to offset weather-related declines in crop yields.

Meanwhile, consumer companies tied to cooling demand could experience stronger sales during prolonged heatwaves.

VULNERABLE SECTORS

According to InnovestX, several industries could face significant earnings pressure if El Niño intensifies. Hydropower operators may suffer from lower reservoir levels that reduce electricity generation, while electric vehicle manufacturers and battery producers could face higher raw material costs if extreme weather disrupts supplies of lithium and copper.

The brokerage also expects higher feed grain prices to squeeze margins for processed meat manufacturers, while tourism and hotel operators may encounter weaker travel demand, wildfire-related disruptions and rising cooling costs.

As climate change increases the frequency and intensity of extreme weather events, investors should increasingly view natural disasters as long-term market drivers rather than temporary disruptions, noted InnovestX. Positioning portfolios around climate resilience and weather-sensitive sectors may become an increasingly important component of investment strategy in the years ahead.