Record El Nino Threatens Asia with Drought, Potentially Raising Global Prices

All signs point to a record-breaking El Nino this year, a natural climate cycle expected to bring severe drought to Asia and other extreme weather events globally, according to experts. This intensification threatens food security for millions and compounds existing economic challenges in vulnerable regions.

El Nino is characterized by warmer-than-usual sea surface temperatures in the Pacific Ocean, altering global weather patterns every few years. This year's phenomenon is expected to reach unprecedented levels of drought, heat waves, and flooding across South America, Africa, and Asia. Global oceans have already set new temperature records in August as the climate warms, contributing to El Nino's severity.

The United Kingdom's national weather and climate service suggests this El Nino could be the "strongest in living memory." The U.S. National Oceanic and Atmospheric Administration estimates a 69% probability that it will be the strongest recorded since 1950.

Southeast Asia, already grappling with an energy crisis and the ripple effects of higher energy costs and scarce fertilizer supplies due to geopolitical conflicts, has less capacity to cope with the intensifying El Nino. Forecasts indicate the phenomenon will peak in December, exacerbating wildfires that are already depleting water supplies for major cities and impacting regional fisheries.

Food security worldwide is at risk. The United Nations' World Food Programme warns that at least 49 million more people could face acute food insecurity by the end of 2027. The impact is expected to be most severe in parts of Central America and southern Africa, with significant effects anticipated in eastern Africa and South and Southeast Asia.

In Indonesia, wildfires are torching forests and peatlands, creating plumes of toxic haze. The water level of Jakarta's main reservoir is dropping significantly, revealing submerged villages and raising alarms about the city's water supply for its 42 million inhabitants. Experts warn that El Nino has only begun its "super phase."

Less rainfall and hotter temperatures are also pressuring Southeast Asia's fisheries, a crucial protein source. The Mekong River basin, vital for fishing and farming communities across six nations, is experiencing disruptions from mining and hydropower dam construction, further straining resources.

As a result of the drought, farmers may be forced to delay planting, reduce acreage, or switch crops. Globally, this could impact staple crops like rice and palm oil. The world's top three rice exporters—India, Vietnam, and Thailand—are among the nations most likely to be severely affected by El Nino.

Indonesia and Malaysia, which together supply about 85% of the world's palm oil, are also facing challenges. In Indonesia, the absence of rain can prevent farmers from dissolving fertilizers into the soil, potentially harming plants and national production. Malaysia's prime minister has directed the Ministry of Agriculture and Food Security to mitigate El Nino's impact, which is forecast to hit hardest in November.

While calculating the total economic fallout of an extreme El Nino is complex, past events have resulted in trillions of dollars in losses. Analysts at Goldman Sachs estimate that the current El Nino could increase global food commodity prices by over 15%.