Inside El Nino – Indonesia’s farmers brace for palm oil impacts

As part of CGTN’s special series Inside El Niño, this report turns to Indonesia’s largest palm oil-producing province of Riau in Sumatra, where smallholder farmers managing an estimated 1.7 million hectares of plantations face declining yields, rising costs and heightened risk of peatland fires amid forecasts of below-average rainfall and higher temperatures through October. 

Under extreme dry conditions, monthly output can drop by as much as 50 to 70 percent from typical levels, echoing the devastation of the 2015 El Niño when widespread fires destroyed entire plantations and left growers struggling to recover. Smallholders, who account for a significant share of production yet have limited access to irrigation, capital and buffers against losses, are especially vulnerable compared with larger operators. 

National output, which exceeded 51 million tonnes in 2025, is projected to fall by up to 2 million tonnes this year largely because of the climate pattern and fertilizer expenses, threatening both livelihoods and one of Indonesia’s most important agricultural industries as the critical dry months ahead will determine whether many can weather the season.