TEMPO.CO, Jakarta - Southeast Asia is bracing for an extreme El Nino weather pattern as households and governments in the region are struggling to respond to higher energy, transport and food bills linked to the Iran war.
The UN weather agency, the World Meteorological Organization (WMO), expects the El Nino conditions to emerge before August and continue until at least November. This means surface waters in large parts of the Pacific Ocean will warm up more than usual, and a disruption in the usual east-to-west wind pattern is likely to bring more heat to central and eastern Pacific.
Southeast Asia is entering the months when monsoon rains usually replenish water reservoirs, cool overheated cities and inundate the fields ahead of the next planting season. However, if the rains arrive late or are weaker than normal, farmers may delay planting, reduce acreage or switch away from water-intensive crops.
"Southeast Asia's agricultural sector is exceptionally vulnerable to a new El Nino shock, given that its two primary commodities, rice and palm oil, are highly concentrated and uniquely sensitive to climate anomalies," Jason Lee, chair of the Global Heat Health Information Network's Southeast Asia Hub, told DW.
"This extreme exposure means that what begins as a localized, farm-level shock can rapidly spill over into a broader, systemic food-price and inflation crisis across the region."
Rice, palm oil and the inflation risk
For Southeast Asian nations, rice crops are the biggest political risk. It is the region's staple food, closely tied to rural livelihoods and likely to trigger public anger if its prices rise.
Rice is likely to be the most affected staple crop due to reduced rainfall and increased heat stress, Paul Teng, a visiting senior fellow in the ISEAS–Yusof Ishak Institute's Climate Change in Southeast Asia Programme, told DW.
"In the rain-fed rice areas, there will likely be higher incidence of localized droughts and in the irrigated rice areas there will likely be water stress due to lower reservoir and irrigation levels," Teng said, noting that the most vulnerable countries are Thailand, the Philippines, Indonesia, and Cambodia.
The region could see a 2%–8% reduction in rice output compared with a normal year, with larger local losses in drought-prone areas, he added.
Palm oil is the other major concern, especially in Indonesia and Malaysia, which together account for around 85% of the world's supply.
"Palm oil is sensitive to the expected temperature rises, but unlike rice, the impacts may be felt 6–12 months later from reduced fresh fruit bunch formation and oil extraction rates," Teng said.
Fertilizer and gas costs have risen sharply due to the ongoing war in Iran, and an extreme El Nino would drive prices even higher, analysts warn. This has also already led to higher food prices across the region.
Markets often react not only to shortages, but also to fear of shortages, pushing prices up before harvest losses are fully known, Lee noted.
"This leaves central banks on high alert, forcing them to maintain elevated interest rates to combat sticky, food-driven inflation at the exact moment that regional businesses face higher borrowing costs and government budgets are already strained by needed subsidies and soaring energy bills," he added.
Economic storms brewing
Several Southeast Asian governments have already turned to coal to compensate for energy shortages and introduced subsidies on food and basic services.
And the Asian Development Bank has cut its 2026 growth forecast for developing Asia and the Pacific from 5.1% to 4.7%, with much of the blame placed on the Iran war.
Philippine inflation remained above target in May at 6.8%, while Vietnam's annual inflation rate rose to 5.6%. Indonesia's headline rate is lower, but a 32% rise in some non-subsidized fuels has added to cost-of-living concerns and put pressure on subsidies.
The economic impact is also not likely to stop at farms or dinner tables. Temperatures above 40 degrees Celsius (104 Fahrenheit) would also hit the region's vital tourism sector.
A dry spell could also ignite agricultural and peatland fires in haze-producing hotspots like northern Thailand, the Indonesian territories of Sumatra and Kalimantan.
"A big El Nino will increase the likelihood of serious transboundary haze. This will increase hardship among the populations, where public health risks are heightened among other societal issues," Helena Varkkey, associate professor of Political Ecology at Universiti Malaya, told DW.
Haze also tends to test regional diplomacy. Governments are often reluctant to restrict plantation activity too aggressively when farmers and companies are already under pressure from high input costs.
"Similar to when the COVID-19 pandemic coincided with haze events, governments may have a hard time balancing between economic and social priorities," Varkkey added.
From climate shock to political pressure
For regional governments already battling to contain inflation, "this combination of a climate shock and a geopolitical war destroys their fiscal breathing room," said Lee from the Global Heat Health Information Network.
"Historically, across Southeast Asia, when the price of rice and fuel rises past a certain threshold, public desperation rapidly turns into political volatility," Lee cautioned.
The warning comes after a year of youth-led unrest and anti-corruption protests in several Southeast Asian countries.
In Indonesia, students rallied again in Jakarta last week against President Prabowo Subianto's spending plans and a fuel price hike, demanding lower fuel and food prices.
In the Philippines, an already tense confrontation between the two main political factions has been heightened by widespread public anger over a vast corruption scandal, while Malaysia's Prime Minister Anwar Ibrahim has also floated the possibility of a snap general election if tensions within his ruling coalition worsen.
"Governments face the very real threat of mass protests, labor strikes in manufacturing hubs, and intense domestic unrest that can destabilise administrations and upend regional trade agreements," Lee said.
Forecasts can change, and governments still have time to secure water supplies, manage stocks, target subsidies and warn farmers before planting decisions are locked in.
But the margin for error is narrowing. A strong El Nino, arriving alongside expensive fuel and fertilizer, could turn Southeast Asia's cost-of-living squeeze into the region's next major political test.
Read: Drought and Floods: How El Nino Fuels Global Weather Extremes
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