China Consumer Staples Food What we learn from past El Niño cycles

Equity Research 15 September 2026 | 12:32AM HKT

Food: What we learn from past El Niño cycles; nuts likely face headwind while sunflower seeds/konjac are mixed

Aside from the broader piece from our staples team on the potential risk from El Valerie Zhou | Niño to key commodity prices (including sugar/palm oil/soybeans costs) across our Goldman Sachs (Asia) L.L.C.

staples universe as well as our sensitivity analysis, we further provide analysis on our Adrian Chung | Food coverage names with major key input cost exposure, including Goldman Sachs (Asia) L.L.C. konjac/sunflower seeds/nuts/fish surimi within snacks and frozen food, for reference. We present three key highlights below: Leaf Liu | Goldman Sachs (Asia) L.L.C. 1) Historical precedent (2015-2016 - Super El Niño, 2023-2024 - strong El Niño) Christina Liu | shows nuts facing headwinds, sunflower seeds mixed while konjac seeing Goldman Sachs (Asia) L.L.C. smaller impacts: Nuts - mainly imported: in 2024-25, drought in Africa drove cashew costs up 2-12%, leading Chacha’s nuts GPM to decline 4.4-7.5ppt, while nuts also recorded low GPM during 2016-2017; Sunflower seeds: during 2016-2017, Chacha GPM saw a limited decline (<2ppt) on roughly flat costs, yet excessive rainfall in Sep 2024 in Inner Mongolia reduced premium-grade seed availability, raising procurement costs, with Chacha’s sunflower-seed GPM declined 5.0ppt in 2025; Konjac: consistent hot and dry weather in China in 2024 reduced planting area by 20% and drove konjac prices. Yet, Weilong/Yankershop delivered resilient margins at 1.7ppt/2.4ppt yoy decline for 2024 and -1.6ppt/+1.2ppt yoy in 2025, thanks to efficiency gains. Similarly, Yankershop saw <1ppt on konjac margins in 2017 despite 14% yoy in costs; Surimi: Anjoy saw 4.2ppt GPM yoy contraction in 2015, but mainly due to ASP cut to gain share alongside raw material cost tailwinds;

2) Current input costs remain manageable: In August, US PPI data showed almond prices declined 6% YoY and flat MoM. Nut cost trends varied with tree nuts (including cashews) down 4% YoY while pistachio prices rose 10% YoY; however both were flat MoM. Sunflower-seed procurement costs also remained manageable at -18% yoy despite a 4% MoM rise in early-Sep, and we note healthy weather conditions around the harvest regions (Exhibit 4, Exhibit 5) and healthy supply/demand per channel checks. US Cod prices showed signs of slowing at 12% MoM in August, now at 18% YoY from 40% yoy in Jul while China fish price remained stable at 1%/-3% YoY/MoM in early-Sep.

3) Key to watch into 4Q26/early-2027: Looking into 2027, our snacks and frozen foods coverage appears less exposed within staples to the El Niño-driven agricultural inflation cycle per our analysis in the El Niño cost note, given <10% COGS exposure to sugar/palm oil/soybeans (except for Ligao at 30% COGS mix of palm oil)

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Goldman Sachs China Consumer Staples

compared with our staples universe of 5-30%/6-30%/10-21%. On a positive note, we also see potentially easier competitive dynamics increasing pricing power (nuts) or new product innovation (konjac, protein based products) that could help mitigate cost pressure. That said, given volatility of raw material prices, we see investor concerns on potential movements of raw material costs during the key procurement & harvest period into 4Q26, with sunflower seeds/konjac/pistachio harvesting in Sep to Oct/Oct to Dec/late-Aug to Oct while Anjoy’s surimi procurement begins in October.