Kalimantan's rivers are too low to carry coal and palm oil

Kalimantan digs and grows a large share of what Indonesia sells to the world, and much of it leaves the island by water. Right now the water is not there. A severe drought has pulled river levels down across the Kalimantan provinces on Borneo, and deliveries of coal and palm oil are being held up as a result, Nikkei Asia reports. A photograph with the story shows a dried-out riverbed at Palangkaraya in Central Kalimantan.

The cause is El Nino, a pattern in which the surface of the Pacific Ocean near the equator turns warmer than normal. For Indonesia that usually means a dry season that starts early and runs long. Nikkei's reporters, Ismi Damayanti and Rezha Hadyan, write that this year's El Nino is a strong one and that the drought is likely to persist into early 2027.

The mechanism is simple and hard to work around. A loaded boat needs a certain depth of water under it, so when a river falls, cargo either travels in smaller loads or waits for rain. Nikkei warns that the squeeze threatens to push up production costs, and then prices, for both commodities. Neither problem has a quick fix, because the only thing that refills a river is rain that the forecast does not expect for months.

Why it matters

Coal and palm oil are two of Indonesia's biggest earners, so shipping delays reach the state's export income and the companies that employ people across Kalimantan. Palm oil also goes into the cooking oil on your kitchen shelf, and a supply that moves slowly tends to cost more. If you run a small food business or buy cooking oil in bulk, watch the price through the turn of the year rather than week by week, because the dry spell has months left to run.