September 10, 2026 | 08:45 pm
TEMPO.CO, Jakarta - ASEAN countries are bracing for inflation as El Nino forces rising prices of rice, wheat, corn, and vegetable oil, according to OCBC Group Research on Wednesday, September 9, as quoted from Antara, citing Xinhua.
Lavanya Venkateswaran, a senior economist for ASEAN and India, said in a note that she believed the Philippines, Indonesia, and Thailand are among the ASEAN countries more vulnerable to El Nino, while Malaysia and Vietnam face significant but more concentrated risks.
Rising food prices "can add to regional inflationary pressures, with imported inflation risks also rising considering most of this region are net food importers," she said, quoted as saying by Xinhua.
She noted that, aside from Thailand and Vietnam, the region's major economies are generally net importers of rice, making the Philippines, Malaysia, and Indonesia vulnerable to potential terms-of-trade shocks from rising rice prices.
She added that the majority of economies in the region, including the ASEAN-6, are large net importers of grains and are highly vulnerable to inflationary pressures originating abroad when global wheat and corn prices rise.
Furthermore, she stated that the transmission of food inflation will vary, depending on the weight of food in the consumer price basket, the degree of import dependence, and government intervention through measures such as subsidies and price controls.
The impact on growth is expected to be more uneven and largely concentrated in the agricultural sector. Indonesia, the Philippines, Thailand, and Vietnam, which have relatively large agricultural sectors, are at higher risk of declining production and weakening rural incomes.
However, she believed that agricultural exporting countries such as Indonesia, Malaysia, Thailand, and Vietnam can partially offset the impact through increased commodity export revenues.
"The ultimate macroeconomic impact will depend not only on weather outcomes but also on policy responses, including food trade restrictions, stock releases and subsidy measures," she added.
Read: What Drove Indonesia's August Inflation to 3.19%?
Click here to get the latest news updates from Tempo on Google News
How Climate Change and Food Insecurity Could Fuel Conflicts
4 hari lalu
Climate change, conflict, and trade tensions are putting pressure on the global food system.
2026-27 US Winter Forecast: Pockets of Snowfall as El Nino Grows
6 hari lalu
A relatively mild winter is in store for the US, but a stretch of colder, snowier season can be expected across parts of the country.
WMO: Strengthening El Nino Raises Flood, Drought Risks
7 hari lalu
The WMO reported that a strong El Nino will peak in late 2026 and persist through early 2027, heightening risks of floods, droughts, and heatwaves.
'Supersized' El Nino to Persist into 2027, UN Says
7 hari lalu
The current El Nino could end up being the strongest since records began 40 years ago, the UN warns.
Peru Declares State of Emergency Over El Nino Threat
8 hari lalu
Peru declared a 60-day state of emergency in 893 districts across 23 regions, following imminent risks posed by heavy rains linked to El Nino.
BMKG: Extreme Drought Hits 43% of West Java
9 hari lalu
Throughout August 2026, 43 percent of West Java experienced extreme drought, according to BMKG.
Prabowo Targets End to Indonesia's Forest Fires Within Two Weeks
15 hari lalu
President Prabowo Subianto hopes Indonesia can extinguish forest and land fires within two weeks as El Nino drives a severe dry season.
The Far-Reaching Economic Impact of Wildfires
18 hari lalu
Wildfires amidst the intensifying El Nino conditions could result in far broader economic impact beyond a mere scorched land or forest.
Panama Canal to Cap Ship Transits Due to El Nino Drought
20 hari lalu
Panama Canal will cut daily transits of ships from September because of low rainfall and amid an intensifying El Nino event.
How Will Singapore GP Handle Haze During F1 Race?
21 hari lalu
The Singapore GP said haze is covered under its overall contingency plan.
