Indonesia haze threatens oil palm pollination, raising risks to global palm oil supplies

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Haze threatens palm oil supplies

Highlights

The Indonesian Oil Palm Research Institute reports that thick haze could reduce oil palm fruit formation by up to 20%, threatening global palm oil supplies.
The U.S. Department of Agriculture forecasts that palm oil stocks will fall to a nine-year low in the 2026-2027 season, with haze and El Niño-related water stress posing risks to yields.
Haze-related pollination disruptions could prevent oil palm fruit bunches from forming, reducing yields and potentially causing millions in losses for the industries in Indonesia and Malaysia.

This article was translated from the original. Read the original version by our correspondent here.

Haze risks to pollination and harvest yields

As reported by The Edge Malaysia, citing the Indonesian Oil Palm Research Institute, thick smoke and reduced sunlight caused by forest fires in Indonesia could disrupt beetles that carry pollen from male to female flowers on oil palm trees. The institute said such disruption has previously been linked to a decline of up to 20% in the share of flowers that develop into palm fruit, potentially reducing oil supplies.

Agus Eko Prasetyo, a crop protection researcher at IOPRI, said prolonged haze could reduce the beetles’ ability to pollinate effectively. He also studied the insects during the major fire and haze crisis in 2015, when visits by beetles to female flowers fell sharply, likely because of dimmer sunlight and other environmental changes.

According to Prasetyo, a plantation may still have a sufficient population of pollinating beetles, but pollination efficiency can fall if the insects become less active in moving between flowers. He added that it is too early to measure the impact of this year’s haze, but any effect on fruit formation is only expected to show up in harvests around March or April, as bunches take five to six months to mature after pollination.

During the regional haze crisis in 2015, IOPRI observed a 5% to 20% reduction in the rate of fruit formation from flowers. Lower fruit formation can result in fewer fruitlets containing oil, putting pressure on yields per hectare at large oil palm plantations in Indonesia and Malaysia.

Supply pressures and implications for the palm oil market

The threat to pollination adds another layer of risk to an already weak supply outlook for the global palm oil market. Indonesia, the world’s largest producer, is also directing more vegetable oil into biofuel production, tightening supplies for food and other uses and potentially raising costs for consumers.

The U.S. Department of Agriculture forecasts that palm oil stocks will fall to a nine-year low in the 2026-2027 season. In this environment, any yield decline caused by a combination of haze and El Niño-induced water stress could prolong the impact on productivity even after weather conditions improve.

Researchers at the Malaysian Palm Oil Board said impaired pollination can also cause fruit to develop improperly or remain seedless, leaving bunches lighter or, in severe cases, preventing entire bunches from forming. This can reduce the amount of oil extracted and potentially result in losses worth millions, underscoring the beetles’ critical role in boosting yields and productivity.

The insects were brought from Cameroon to Malaysia in the early 1980s to replace costly, labour-intensive hand pollination, before being introduced to Indonesia soon afterwards. Across the vast plantations of both countries, where ageing trees and stagnant yields are already a concern, IOPRI scientists say the combination of haze and El Niño could have a compounding effect on palm oil production.

In our previous article, Malaysia lowered its crude palm oil reference price for November to RM4,323.78 per tonne, down from RM4,452.66 in October. However, as the price remained above the RM4,050-per-tonne threshold, the export duty stayed at the maximum rate of 10%, keeping monthly export costs relatively stable for Malaysian exporters.

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