Risks of food, inflation mount for Southeast Asia

Southeast Asia faces mounting food and inflation risks as a probable super El Nino weather phenomenon threatens harvests, compounding the fallout from the Middle East crisis, which has already driven up farm input and transport costs.

Climate extremes that threaten staple crops and geopolitical turmoil that inflates fuel and fertilizer costs have exposed Southeast Asia's vulnerability to overlapping crises, analysts said.

Extremely dry weather is "another shock" for the member states of the Association of Southeast Asian Nations, according to Khor Yu Leng, director of Segi Enam Advisors in Singapore.

Super, or very severe, El Nino is "fundamentally a food inflation story" as prolonged drought and erratic rainfall can reduce food supplies and boost prices, Khor said.

She said that reduced rice supply is an especially sensitive issue as it is a staple crop across ASEAN and a thinly traded commodity. Even a slight disruption in supply can trigger export controls, stockpiling and panic buying that push prices far beyond actual crop losses.

"Food prices often rise faster than crop losses because markets react not just to shortages but to fear," Khor told China Daily.

The United States National Oceanic and Atmospheric Administration, or NOAA, has forecast an 82 percent chance that El Nino will emerge between May and July and persist through February 2027. Since mid-April 2026, near-to-above average equatorial sea surface temperatures have persisted across the central to eastern Pacific Ocean, according to NOAA's latest report.

Malaysia-based meteorologist Sheeba Chenoli said a super El Nino, defined as sea surface temperatures 2 C above average, would likely reduce crop production and trigger wildfires in some parts of ASEAN.

"Global temperatures are already rising because of climate change," Chenoli said. She said that this, combined with the onset of a super El Nino, will further raise global temperatures, alter local weather patterns and reduce farm output.

Cost shock

In a recent research note, BMI, a unit of Fitch Solutions, warned that the conflict in the Middle East has raised agricultural price risks by introducing a cost shock that could overlap with weather-related production stress if El Nino materializes.

BMI noted that the disruption in the Strait of Hormuz is increasing the prices of fertilizer and fuel. If crop prices do not rise sufficiently to offset the higher input and transport costs, it will squeeze farmers' margins, raising the likelihood of lower fertilizer application and weaker yields, it said.

Serina Abdul Rahman, an adjunct assistant professor in the Department of Southeast Asian Studies at the National University of Singapore, said this year's El Nino will also have an impact on food security over the long term.

"There is a snowball effect because once crops cannot grow as usual, seeds and seedlings cannot be guaranteed for the next planting season," Serina said.

She added that rising sea temperatures caused by El Nino will change fish migratory patterns, which can reduce fish catch.

"Fishermen and farmers are at the bottom of the economic pyramid. Their own food will be more expensive because they need to sell their harvest to earn cash for other expenses," Serina said. "They have to suffer food poverty even as they supply food for others."

Chenoli from Malaysia, who serves as an associate professor of meteorology and climatology at the University of Malaya in Kuala Lumpur, said the onset of the super El Nino should be seen as a wake-up call to accelerate climate adaptation in agriculture across ASEAN.

prime@chinadailyapac.com