El Niño Predicted to Threaten Food Security and Economy in Southeast Asia

Southeast Asia is bracing for an extreme El Niño weather pattern at an inopportune moment, as many countries in the region are still struggling to respond to surges in energy, transport, and food costs triggered by the war in Iran. The World Meteorological Organization (WMO) predicts El Niño conditions will begin to form before August 2026 and last at least until November 2026. This means sea surface temperatures across much of the Pacific Ocean will warm higher than usual, and disruptions to typical east-west wind patterns are expected to bring hotter weather to the central and eastern Pacific. During this period, monsoon rains in Southeast Asia usually replenish water reserves, cool cities experiencing high temperatures, and irrigate farmland ahead of the next planting season. However, if rains arrive late or with lower intensity than normal, farmers may delay planting, reduce cultivated areas, or even switch away from water-intensive crops. “Southeast Asia’s agricultural sector is highly vulnerable to a new El Niño shock because its two main commodities, rice and palm oil, are highly concentrated and extremely sensitive to climate anomalies,” said Jason Lee, Chair of the Southeast Asia Hub at the Global Heat Health Information Network. “This massive risk exposure means a shock that initially occurs at the local farm level can rapidly escalate into a systemic food price crisis and region-wide inflation.” For Southeast Asian nations, rice represents the biggest political risk. The staple food is deeply linked to rural livelihoods and can trigger public anger if prices spike. Paul Teng, Senior Researcher at the Climate Change in Southeast Asia Programme at the ISEAS–Yusof Ishak Institute, told DW that rice could be the most affected food crop due to reduced rainfall and increased heat stress. “In rain-fed rice farming areas, more localised droughts are likely to occur. Meanwhile, in irrigated rice paddies, pressure on water availability is expected to increase due to declining reservoir and irrigation system capacities,” Teng said. He added that the most vulnerable countries are Thailand, the Philippines, Indonesia, and Cambodia. According to Teng, the region could see a decline in rice production of around 2% to 8% compared to a normal year, with greater losses in drought-prone areas. Palm oil is another major concern, particularly in Indonesia and Malaysia, which together account for roughly 85% of global supply. “Palm oil is sensitive to the expected temperature increases. However, unlike rice, the impact may only be felt 6 to 12 months later due to reduced fresh fruit bunch formation and oil extraction rates,” Teng noted. Observers also warn that fertiliser and gas costs have already risen sharply due to the ongoing war in Iran. If an extreme El Niño occurs, these prices are expected to climb even higher, a situation that has already driven up food prices across the region. Lee explained that markets often react not just to actual shortages but to fears of scarcity, meaning prices can surge even before harvest losses are fully known. “This puts central banks on high alert and forces them to maintain high interest rates to control food-driven inflation, at a time when regional businesses face more expensive borrowing costs and government budgets are already burdened by subsidy needs and soaring energy costs,” he added. Several governments in Southeast Asia have turned back to coal to address energy supply shortages and have expanded subsidies for food and basic services. The Asian Development Bank (ADB) has cut its economic growth forecast for developing Asia and the Pacific in 2026 from 5.1% to 4.7%, largely attributing the downgrade to the war in Iran. Inflation in the Philippines remained above target at 6.8% in May, while Vietnam’s annual inflation rate rose to 5.6%. Indonesia’s headline inflation is lower, but price increases of up to 32% for some non-subsidised fuels have heightened cost-of-living concerns and added pressure on subsidy policies. The economic impact is not expected to stop at agriculture or household food needs. Temperatures exceeding 40 degrees Celsius could also hit the tourism sector, a key economic pillar for the region. The dry season also risks triggering agricultural and peatland fires in hotspots known for producing haze, such as northern Thailand and the Indonesian regions of Sumatra and Kalimantan. “A major El Niño will increase the likelihood of serious transboundary haze, which will add to the public’s burden as risks to public health rise alongside various other social problems,” explained Helena Varkkey, a professor of political ecology at Universiti Malaya. Haze also frequently tests regional diplomacy, as governments are often reluctant to aggressively restrict plantation activities when farmers and companies are already under pressure from high production costs. “Just as when the COVID-19 pandemic coincided with haze events, governments will likely struggle to strike a balance.”