El Niño threat raises heat, drought risk across Asia crops

The Convergence of Climate and Conflict: A New Era of Agricultural Risk

The global food supply chain is currently facing a “perfect storm.” The intersection of extreme weather patterns and geopolitical instability is creating a volatile environment for farmers, from the wheat fields of Australia to the rice paddies of Southeast Asia.

When a strong El Niño event coincides with regional conflicts, the result is more than just a bad harvest—it is a systemic shock to food security. For the modern producer, managing a farm now requires as much attention to global shipping lanes and oceanic temperatures as it does to soil health.

Asia-Pacific: The Frontline of El Niño

Asia is historically one of the regions most susceptible to El Niño, and current signals suggest a pattern reminiscent of the severe 2015-2016 event. This periodic warming of sea surface temperatures in the central and eastern Pacific often triggers widespread drought across the continent.

Australia’s Harvest Under Pressure

In Australia, the world’s second-largest supplier of canola and fourth-largest exporter of wheat, the impact is already tangible. In states like New South Wales and Queensland, farmers have been forced to scale back planting due to a critical lack of moisture, fuel, and fertilizer.

The reality on the ground is stark. Pat Ryan, a crop and cattle producer near Merriwa in New South Wales, noted that the season has “completely collapsed” after months without decent rainfall.

Southeast Asian Palm Oil and Rice

The risk extends to Southeast Asia, where rice and palm oil production are under threat. While the effects on palm oil are often delayed by six to 15 months due to the crop cycle, the long-term outlook is concerning.

According to industry official M.R. Chandran, while a mild episode might cause limited disruption, a stronger and longer El Niño event could trigger production declines ranging from 5% to 12%.

India’s Monsoon Uncertainty

For India, the monsoon is the lifeblood of the economy. Forecasts suggest rains could be significantly below normal, potentially reaching only 70% to 90% of the average. New Delhi’s own forecast places the expectation at 92% of the long-term average.

Such a deficit threatens summer crops like soybeans, cotton, and rice, while simultaneously stripping soil moisture needed for winter staples like rapeseed and wheat.

Global Ripple Effects: From China to the Americas

While Asia feels the dryness, other parts of the world may experience the opposite extreme. El Niño typically brings heavier rains to North and South America, which can be a double-edged sword.

Excessive rainfall during the US corn and soybean harvest can degrade grain quality and disrupt the physical process of harvesting. Similarly, in southern China, increased flooding risks could jeopardize the production of vegetables and rice.

In Europe, the impact is more varied. While heavy summer rains could benefit corn, the timing of El Niño’s arrival often means European wheat harvests are already underway, potentially shielding them from the worst of the phenomenon.

The Fertilizer Trap: A Vicious Economic Cycle

Weather is only half the battle. The conflict in Iran has choked supplies of petrochemicals and fertilizers, driving costs higher just as yields are expected to drop.

This creates a dangerous economic paradox for the farmer. Vitor Pistoia of Rabobank Australia highlights a “vicious cycle”: when fertilizer becomes prohibitively expensive and rainfall is low, farmers may choose not to apply fertilizer at all. The logic is simple—why invest expensive inputs into a crop that is already destined to be poor?

This decision, while economically rational for the individual farmer, compounds overall yield losses and further threatens global food price stability.

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