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Southeast Asia, Prepare for Haze

Turns out that last year’s prediction for El Niño was a bit premature. This year? Both the Australian Bureau of Meteorology and The Japan Meteorological Agency have released statements that an early stage El Niño pattern has emerged, and will most likely continue to develop into autumn.

That means two things for Southeast Asia: drought and haze.

The summer months are already notoriously bad for haze around many parts of Indonesia, Malaysia, and Singapore, but this year could be extraordinarily (cough, cough) bad.

ElNino_Agricultural_Burnings_ASEAN

An alert has been given to the world’s farmers to prepare for the worst, which could range from South American floods to Southeast Asian droughts. It has been five years since an El Niño pattern has been officially declared.

A key indicator for this tropical climate phenomenon is abnormally warm Pacific Ocean temperatures, which by the way have been trending since the start of the year. Last year a similar pattern began to emerge, but it never fully developed into a definitive El Niño weather pattern.

As with anything in the markets, weather patterns can create winners as well as losers. One of the biggest cash crops in Southeast Asia is oil palms, which would be detrimentally affected by a drought. On the flip side of that pain, though, is soybean. Soy oil is highly correlated with palm oil unless one or the other is hurting. If Southeast Asian oil palms get damaged, North and South American soybeans and soy oil producers could spike, and even outperform.

Officials are the first to admit that accurately predicting the outcomes of weather phenomena is never an easy task. It could be well into the second half of the year before they figure out what damage, if any, the extraordinary weather pattern might have on agriculture.

Living in Southeast Asia, one does not need an advanced degree in meteorology to predict the outcome of an extended dry season. A lot of haze is already on the menu. Any extension or increase in the yearly (supposedly illegal) agricultural slash-and-burns would wreak havoc on the population’s lungs and sinuses—not to mention visibility of some of the most picturesque tourist destinations in Asia.

At this point, governments across Southeast Asia do not seem to care enough to truly put a stop to it so expatriates living in the region really only have choices—either take an extended summer holiday or go local and just ignore the obvious.

Even when it’s burning, “when in Rome” still applies, I suppose…

H/T: Agrimoney