El Niño threatens palm oil production in Indonesia
Indonesia's palm oil sector is bracing for major losses this year as El Niño brings severe drought to Riau, one of the country's largest palm oil production centres. When the climate that has fed plantations for centuries suddenly changes the rules, millions of farmers face a choice: wait for rain or prepare for hunger. El Niño, a natural phenomenon known for its unpredictability, is striking Indonesia – the world's largest palm oil producer – this year.
In Riau, the heart of Indonesian palm oil, drought is already drying out the soil, with yields falling by 50 70%. For smallholder farmers with no reservoirs or financial cushion, every lost kilogram is not just a number but a family's meal. And as meteorologists forecast dry conditions until October, planters brace for the worst, recalling past droughts that left them without income.
The climate situation, which suppresses rainfall and raises temperatures, threatens yields on approximately 1.7 million hectares of smallholder plantations in the region. The country's meteorological agency warned that Riau will see below average or moderate rainfall until October, with several areas already recording critically low soil moisture. For oil palms, which depend on consistent rainfall throughout the growing season, this shift poses a direct threat to high yields. "Climate change really affects oil palm plantations.
Normally, a plantation can produce about three tonnes per hectare per month, but under these extreme weather conditions, that figure can drop by 50 70 percent. So clearly, this is a real financial loss for farmers," said Julius Dwi, a palm farmer. Memories of past El Niño events still haunt those who have worked in the industry for years. Andrey, a local resident who has managed his plantation in Riau for over a decade, says the weather conditions remain alarming. "We were certainly in shock, absolutely in shock. We were completely stunned because we didn't meet all our monthly yield targets per hectare. The same situation was at the loading dock. Normally, drivers go out almost every day, but instead, all the trucks just stood there idle," said Andrey.
Production declines are expected to have national consequences. Indonesia produced over 51 million tonnes of palm oil in 2025, but this year's output is forecast to fall by as much as two million tonnes, mainly due to El Niño and rising fertiliser prices. The Indonesian meteorological agency continues to urge plantation owners to prepare for drought by strengthening water management systems and closely monitoring weather conditions through the end of 2026. But for smallholders like Andrey and Julius, with limited resources, implementing these measures in practice is far more difficult than it seems. For them, the next three months may determine whether they can survive this harvest season.
El Niño is a climate phenomenon that causes warming of surface waters in the Pacific Ocean and leads to droughts in Southeast Asia and Australia, as well as floods in South America. For Indonesia, where palm oil is a key export commodity (exports brought in over $30 billion in 2025), the current drought threatens not only farmers' incomes but the entire economy. Riau, which accounts for about 20% of the country's oil palm plantations, has faced similar crises in 2015 and 2019, but the current forecast looks especially grim. Smallholders, who form the backbone of the industry, often lack access to irrigation systems and must rely solely on rainfall.
The Indonesian government has begun distributing subsidies for fertiliser and fuel for pumps, but these measures are insufficient. According to local NGOs, up to 40% of smallholders could lose half their annual income if the drought lasts until October. In the long term, climate change calls into question the sustainability of the entire palm oil industry, which is already criticised for deforestation. Malaysia, the world's second-largest palm oil producer, is also reporting lower yields due to similar weather conditions, exacerbating global supply risks.
As CCTV+ reports, this year's El Niño has become not just a climate anomaly but a harsh test for millions of Indonesian farmers, whose livelihoods depend on nature's whims, showing that global warming is already knocking on the doors of the most vulnerable populations.
