Political Fallout from El Nino

Droughts often have political consequences. So the current El Nino which has caused high temperatures and low rainfall through much of Southeast Asia could well have consequences soon.

Much depends on whether the rains this summer are normal in terms of timing and amount but meanwhile many are suffering. The El Nino is slowly weakening according to climate scientists but could continue through April and delay the onset of the summer monsoon. Whether it is followed by normal conditions or the reversal, the La Nina, which brings heavier than normal rains, is unsure.

As a graphic example of political consequences, in the Philippines three died when the typically trigger-happy police fired on farmers demonstrating against lack of government help after their crops had failed. Some 6,000 farmers and their families had blocked the Cotabato-to-Davao highway in Mindanao. Upland areas of Mindanao have been especially hard hit and although officials have had months to prepare for relief efforts, little was done.

Whether this tragedy will have any impact on the presidential election next month is uncertain but it may remind voters how remote the politicians are from the problems of ordinary Filipinos. Nor is it just farmers who are being hurt. Residents of Cebu City are facing severe water rationing as reservoirs run dry. For sure, governments cannot control the weather but a severe El Nino had long been predicted so there were opportunities to prepare.

The worst affected parts of Southeast Asia are the islands of eastern Indonesia and Mindanao but peninsular Malaysia, most of Thailand and Cambodia, central Myanmar and Vietnam are all affected. Water shortages have been a source of constant irritation for months in Selangor, the province that surrounds Kuala Lumpur, which is controlled by the opposition.

Malaysia mostly doesn’t need to worry so much about rice, most of which is imported. But a much prolonged and hotter dry season is having a big impact on palm oil output. As a result the price has risen which provides some compensation but overall El Nino is adding to the problems of an economy suffering from low oil and gas prices, high debt levels and an exodus of capital. In the short term, weather may be much less a problem than the 1MDB scandal but is a concern among the Malays, the vast majority of the rural population.

Thailand’s beleaguered military chief Prayuth Chan-ocha is already unpopular enough with the farmers allied with ousted Prime Minister Thaksin Shinawatra, particularly of the northeast, where a harsh military crackdown has been underway since the coup. Several provinces in this region are among those suffering drought, with national rice production down by 16 percent, adding to problems of low prices for most agricultural products. It was Prayuth who cancelled the lavish if misguided rice subsidy program that sustained farmers during the administration of Thaksin’s sister Yingluck. He is also chief of the national water board.

Water levels in major dam reservoirs on the Chao Phraya River tributaries have curtailed power generation and irrigation. According to some sources, water levels are so low as to threaten the integrity of some dam structures. It will need more than normal rains to restore them to a comfortable level.

The impact on central Myanmar, always a dry zone, is said to be the worst ever with temperatures reaching 45 degrees centigrade. The same applied to parts of Vietnam including the central highlands and the Mekong Delta. Reduced rain has reduced the flow of the Mekong and others rivers contributing to saline intrusion reaching far inland and affecting plant growth.

With the Philippines and Indonesia both importing more rice and with Thailand and Vietnam seeing lower production, Thailand’s stock excess built up by price supports by the former Yingluck government will be reduced. But despite El Nino affecting so much of the rice growing world, export prices have barely moved, fluctuating around the US$370-400 level compared with US$600 three years ago. Stocks remain high because of good harvests in the preceding year in Bangladesh, Pakistan and China and elsewhere.

From a global perspective rice availability is more an outcome of acreage than weather patterns and in turn acreage responds to price. The current price level may be insufficient to sustain acreage even though prices of fertilizer inputs have also fallen.

The overall world stock situation remains stable around 33 percent of annual consumption but the stocks of the leading exporters have fallen sharply and are forecast 1t just 14 percent by the end of this year compared with 27 percent three years ago, That suggests some market tightening may lie ahead even if conditions return to normal this year.

But unless Thailand is prepared to continue subsidizing rice prices to buy farmers’ favors, a big increase will be need to make rice growing profitable for many. The political temperature, fanned by the military crackdown in Thaksin’s base, is liable to rise.