Andean Group - August 2026

On 20 July, Ecuador raised its warning level for conditions associated with the El Niño weather phenomenon from yellow to orange, following a period of four weeks of study by Erfen, a national committee that monitors Pacific Ocean temperatures and other indicators. Although there is no exact timescale, El Niño is expected to arrive in earnest in around November and last until approximately March, bringing risks including heavy rains, flash flooding, and changes to the behaviour of fish and birds. President Daniel Noboa’s government has allocated a budget of US$600m to mitigate these impacts.

One area that is likely to be particularly affected is Ecuador’s crucial shrimp sector. Shrimp was the country’s main non-oil export in 2025, with central bank figures showing exports totalling US$9.98bn – more than double the US$4.14bn exported by the mining sector. Shrimp exports already registered a sharp decline in the first quarter of 2026, totalling US$4.08bn – down 14.0% in quarterly terms and 8.1% year-on-year.

The sector has recently been struggling due to high availability and low demand for shrimp, according to an 18 June report by the international credit ratings agency S&P Global, which warned that El Niño may “introduce fresh volatility” and “disrupt logistics, creating uneven price movements amid oversupply”.

There is some variation in that below-normal rainfall and high temperatures have led to high mortality among larger shrimp, leading to higher prices for that category. However, the warmer water temperatures and heavy rainfall associated with El Niño are likely to accelerate shrimp growth over the coming months, meaning a likely increase in supply of these sizes and a return to lower prices.

At the same time, a strong El Niño could cause major flooding and infrastructure damage on the Ecuadorean coastline, impacting logistics and raising the chances of contamination. A further indirect risk is posed by El Niño’s likely impact on Peru’s anchoveta fisheries, one of the world’s main sources of fishmeal, which is likely to raise input costs for shrimp farmers in Ecuador. This, S&P said, “may limit producers’ willingness to fully capitalize on improved growing conditions”.