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El Niño Intensifies Drought Concerns for Indonesia's Crucial Palm Oil Sector

زيت النخيل أصبح وقودا لسيارات السباقات
July 30, 2026

Indonesia's Meteorology, Climatology and Geophysics Agency (BMKG) forecasts that the majority of the nation's primary oil palm growing regions will experience low to moderate rainfall between August and October 2026. This outlook is largely driven by the ongoing El Niño weather pattern, which continues to suppress precipitation across numerous agricultural areas.

As Indonesia accounts for approximately 57% of global palm oil production, prevailing weather conditions are a critical determinant for the international vegetable oils market. The productivity of oil palm trees relies heavily on well-distributed rainfall and adequate soil moisture levels throughout the growing season.

According to BMKG, about 71.6% of Indonesia is expected to receive low rainfall in August. Dry conditions are projected to intensify significantly in September, affecting more than 77% of the country. Only a minor portion of the territory is anticipated to receive heavy rainfall during this period. While conditions are expected to improve somewhat in October, most palm-producing regions will still contend with low to moderate precipitation.

Beyond reduced rainfall, BMKG also expects precipitation across most of Indonesia to remain below the long-term average throughout the August-October period. Specifically, below-normal rainfall is forecast for roughly 86% of the country in August, nearly 88% in September, and over 81% in October.

In response to these challenging projections, BMKG has urged plantation companies and smallholder farmers to bolster their drought preparedness. Key recommendations include enhancing water management systems, actively conserving soil moisture, and diligently monitoring weather conditions throughout the dry season. These proactive measures are deemed essential to mitigate potential production losses and sustain palm oil output through the end of 2026.

Source: UkrAgroConsult