El Nino drought chokes palm oil shipments, leaves Indonesian farmers with rotting fruit

A severe El Niño drought in Indonesia has crippled palm oil shipments, leaving farmers with rotting fruit. Supendi, a 33-year-old farmer, waited four days to unload his harvest at a mill in West Kalimantan, only to be told to leave as storage tanks were full. Local mills cut purchases due to filled tanks, unable to ship processed oil.

The main transportation artery, the Kapuas River, is dry, affecting 40% of West Kalimantan's palm oil output. The river's reduced flow has caused sandbanks and grounded barges, limiting road deliveries. The El Niño weather pattern, caused by warming Pacific Ocean waters, has led to wildfires and poor air quality, affecting Indonesia and neighboring Malaysia and Singapore.

West Kalimantan, which accounts for 11% of Indonesia's palm oil output, faces a potential 12-15% reduction in fourth-quarter production. 13 of 50 mills in the province are impacted, causing supply to fall by 11% in September. Farmers struggle to sell their fruit, leading some to cut fertiliser applications by up to 70% to save costs.