The El Niño–Southern Oscillation and Food Consumer Price Index in Landlocked Developing Countries

Abstract

Landlocked Developing Countries (LLDCs) are highly vulnerable and often are affected by high levels of poverty and food insecurity conditions, due to limited market access, high transportation costs, and reliance on food imports, which increases their exposure to climatic shocks. Domestic food prices play an important role in determining food security conditions in these countries as it directly affects households’ purchasing power and access to food. Understanding how the LLDCs react to different weather shocks is therefore important in order to be able to inform governments and international community about targeted interventions and support preparedness to minimize the impacts on food security and protect vulnerable populations. A key driver of weather extremes is El Niño Southern Oscillation (ENSO) phenomena, which has two phases El Niño and La Niña, each associated with extreme weather events such as floods, droughts, and storms, which are a major driver of agricultural production changes, yet the connections between ENSO and inflationary pressure remained underexplored in LLDCs. This paper addressed this gap, by combining econometric analysis with a wide range of dataset, providing evidence for symmetric and asymmetric impact on domestic food prices, using data on Food Consumer Price Index, with the series for all countries extending until September 2024. ENSO is measured using the Oceanic Niño Index (ONI), with standard thresholds to identify El Niño, La Niña and Neutral months. The panel covers thirty LLDCs over 2000–2024, excluding two LLDC namely Central African Republic and South Sudan due to data unavailability. This analysis reveals that the mean FCPI value increased significantly during La Nina periods and slightly during El Nino periods as compared with the mean FCPI during neutral period. Preliminary results point to a strong and persistent inflationary pressure during La Niña periods, estimated between 0.7 and 1.5 percent, while El Niño periods show a generally weaker and more mixed response. These findings highlight the asymmetric nature of ENSO impacts on food CPI. For LLDCs, where food security conditions are already fragile, the impacts brought by La Niña exacerbate the already existent structural vulnerabilities, increasing food insecurity levels in LLDCs. JEL: Q110, Q020, Q540