South-east Asia braced for fires and drought brought on by El Niño

Sweltering heat spreading through south-east Asia in recent weeks heralds the return of El Niño, with governments across the region bracing to fight water shortages, forest fires and clouds of choking haze as the weather pattern strengthens.

Soaring temperatures could threaten agricultural output in a region that is a top producer of palm oil, rice, coffee beans and other commodities, while pressure on supplies of water and power could hit the rapidly growing manufacturing industry.

“El Niño has arrived,” Dwikorita Karnawati, head of Indonesian climate and meteorological agency BMKG, told reporters in Jakarta in early June. “The peak of El Niño . . . is predicted to occur in September across nearly . . . [all] regions of Indonesia.”

Seven Indonesian provinces — mostly palm oil-producing areas on the islands of Sumatra and Borneo — have recently been placed under emergency alerts amid rising worries about forest and peatland fires in the coming months due to drought brought by El Niño.

“Naturally, it will be very easy to ignite [fire] hotspots. So extra care is needed,” Karnawati said.

El Niño is a climate pattern originating in the Pacific Ocean, marked by above-average sea surface temperatures. It typically brings hot and dry conditions to south-east Asia, in contrast to the wetter and cooler weather from La Niña.

After three years of La Niña up to early 2023, El Niño is returning. Karnawati said it is expected to strengthen in the next few months after starting off weak in June.

She added that this year could be a repeat of 2019, when a moderate El Niño contributed to devastating land and forest fires in south-east Asia’s largest economy, with the World Bank estimating that losses reached $5.2bn.

Those fires caused a thick haze that passed over national borders, disrupting hundreds of flights at home and in neighbouring Singapore and Malaysia, as well as stoking respiratory problems in millions of people.

Authorities in Singapore have warned residents that fire hotspots could escalate from June, and are co-ordinating plans to mitigate the risk of haze returning from Indonesia and Malaysia.

“Members of the public are also advised to make preparations such as ensuring that they have sufficient . . . face masks and air purifiers in good working condition,” Meteorological Service Singapore said in late May.

The scorching weather driven by El Niño is expected to drag on harvests of crops such as palm oil in Indonesia and Malaysia, the world’s two largest producers of the commodity, which is in products ranging from chocolate to soap. It is also likely to hit rice farming in countries such as Thailand and Vietnam along with corn output in the Philippines.

The impact may not be immediate, according to an executive at Indonesian palm oil producer Astra Agro Lestari, who said lower harvests might only be seen two years after El Niño started.

But the Malaysian Palm Oil Board said in May that El Niño might cut the country’s crude palm oil output by as much as 3mn tonnes in 2023. The nation produced 18.45mn tonnes of the commodity last year.

In Vietnam, the National Centre for Hydro-Meteorological Forecasting has predicted record heatwaves as well as drought, saltwater intrusion and water shortages that will continue into the first few months of 2024 “on a large scale” due to El Niño.

The Vietnam Coffee and Cocoa Association cited a report warning that coffee production could decline as much as 20 per cent in 2023. Vietnam is a top exporter of the robusta variety of coffee beans, as well as rice.

In Thailand, the world’s number two exporter of rice and sugar, temperatures in April reached the highest on record for the country at 43C.

Thailand’s Office of the Cane and Sugar Board has forecast that domestic sugar cane production will drop to 70-80mn tonnes this year from 94mn tonnes in 2022. Bangkok-based Kasikorn Research Centre, meanwhile, estimated a 6 per cent fall in rice production to 25mn tonnes.

Indeed, the nation’s agriculture ministry has asked farmers not to grow rice in the off-season to spare water for other crops, as well as for the industrial and tourism sectors.

In the Philippines, initial estimates show that local rice production may fall by about 1.8 per cent and yellow corn by 1 per cent in 2023. While the economic impact could be minimal, the country’s central bank considers El Niño’s impact on food and energy prices as upside risks to inflation, which has decelerated but remains well above the government’s target.

Shotaro Kumagai, economist at the Japan Research Institute, wrote in a recent report that agriculture accounts for a high share of gross domestic product in Asia’s emerging economies. “Therefore, a decline in agricultural production and resulting inflation are expected to put strong downward pressure on the economy,” he wrote.

El Niño is also expected to affect hydropower output, as well as pushing up energy demand as businesses and homes crank up their air conditioning.

Water shortages have already hit hydropower production in Vietnam, driving electricity outages across the economy. In early June, Bac Giang province — home to Samsung and Apple suppliers — scheduled hours-long brownouts by district, though big manufacturers have reportedly been able to resume some production.

State utility Electricity Vietnam has declared a “national electricity-saving movement”, asking for government and household austerity and for businesses to limit heavy machinery usage during peak hours and to adopt renewable energy on-site.

In Thailand, major industrial estates — particularly in the well-promoted Eastern Economic Corridor — are preparing for El Niño by filling up their private water storage facilities to ensure supplies for tenants.

There are concerns that the drought could last longer than expected. “What the government could do now is to store as much rainfall [as possible] during the rainy season [through around October],” said an official from the Thai government’s irrigation department.

In June, Malaysia’s National Disaster Management Agency began cloud seeding — the approach to producing rain artificially — in the northern region of Peninsular Malaysia, where the Meteorological Department has warned of receding water supply in major dams.

That area includes Penang, home to most of Malaysia’s semiconductor industry, which relies on large supplies of water.

Philippine president Ferdinand Marcos Jr in a vlog last month emphasised the importance of conserving water in the face of El Niño, especially in places such as houses, car washes, golf courses and swimming pools.

“All of us can help. All of us can do something,” Marcos said.

The economist Kumagai suggested that introducing wastewater recycling facilities at factories and expanding agricultural insurance programmes could be critical measures to cushion the economic fallout from El Niño.

“These approaches are essential not only for El Niño but also for La Niña and other risks stemming from climate changes. The progress of these efforts will determine the medium- and long-term economic growth rates of Asian countries,” he said.

Additional reporting by Cliff Venzon in Manila, Ismi Damayanti in Jakarta, Norman Goh in Kuala Lumpur and Tsubasa Suruga in Singapore

A version of this article was first published by Nikkei Asia. ©2023 Nikkei Inc. All rights reserved.

Related stories