El Niño Ignites Indonesian Palm Oil Crisis

Indonesia's palm oil industry is facing unprecedented challenges due to an intense combination of wildfires and drought caused by El Niño. The country, which produces over one-third of the world's palm oil, has been battling its worst wildfires in recent years. According to data from ChemAnalyst, around ***,*** hectares burned across Indonesia from January to July, with another ***,*** hectares damaged in August alone.

The damage is concentrated in Kalimantan, the epicenter of Indonesian palm production, where very dry conditions have led to a further decline in output. After an estimated **, *** decline in August, output could fall by a further **, *** in October to December. This has significant implications for the global supply chain, particularly with rising demand for B50 biodiesel.

Eddy Martono, chairman of GAPKI, warned that the damage done would have long-lasting consequences for the industry and the environment. The scale of destruction on the ground is staggering, with widespread devastation to forests and peatland.