‘Medium risk’ of severe haze as higher agricultural prices drive deforestation: S’pore researchers

SINGAPORE – There is a “medium risk” of severe haze affecting Singapore, Malaysia and Indonesia for the rest of 2025, a local think-tank has assessed in its yearly haze outlook.

But the assessment by the Singapore Institute of International Affairs (SIIA), released on July 28, said that in the event of a haze, it should not be prolonged.

In 2024, the SIIA had said

there was a “low risk” of transboundary haze

. This was assessed based on developments in three areas: markets, weather and policies.

It noted in its report, now in its seventh year, that agricultural commodity prices have been elevated. Agricultural commodities in the region include palm oil, and pulp and paper.

“Prices this year are elevated, and estimates show some uptick in deforestation in Indonesia from 2023 to 2024,” the report said. Deforestation by slash-and-burn techniques can cause forest fires that belch out smoke haze.

Elevated agricultural prices could be due to rising global and regional demand amid lagging supply, according to the report.

Dry weather, as well as new food and energy projects announced by Indonesia, could also drive forest fires, the report noted.

The SIIA assesses transboundary haze risk on a three-level scale of green, amber and red. Green refers to low risk, and red denotes high risk.

The report said the medium risk of transboundary haze in 2025 – up from the low risk assessment the year before – is a concerning shift.

“Early in the year, many weather assessments projected a relatively benign haze season,” said Associate Professor Simon Tay, chairman of the SIIA.

“However, as the situation evolved, it has become clear that regional fire and haze risks are rising – not just from weather but from global economic and policy changes,” he said.

“If this had been assessed a month ago, we might have issued a green rating. But the fires and market conditions warrant caution,” Prof Tay added.

More hot spots in 2025

The release of the SIIA’s annual haze outlook comes amid reports of an escalation in hot spots and smoke haze in parts of Sumatra in Indonesia in mid-July.

Transboundary haze was observed to have drifted from central Sumatra into parts of Peninsular Malaysia, although Singapore has not been affected due to favourable wind direction.

According to Indonesia’s Meteorology, Climatology and Geophysics Agency, the number of hot spots – places with intense heat, suggesting forest fires – in Sumatra

has soared from 94 to more than 1,000 in 10 days

in July.

Haze pollution in the area has spread to Malaysia, which recorded unhealthy air pollution index readings in four locations on July 22.

According to the website of Singapore’s National Environment Agency (NEA), dry conditions are forecast to persist over the southern Asean region over the next few days, except for some showers expected over parts of central and southern Sumatra, Java and the north-eastern parts of Borneo.

The drier conditions, especially over Borneo, may result in an increase in hot spots and smoke haze, with a chance of transboundary smoke haze, according to NEA.

As at July 28, the air quality in different parts of Singapore ranges from good to moderate.

Multifaceted problem

Other than commodity prices, the SIIA also assesses haze risk based on weather and government policies.

Forest fires and the spread of haze can be made worse by dry weather, changes in wind direction and low rainfall.

For example, the last time the SIIA assessed haze risk as being “red” was in 2023, mainly due to hotter and drier weather expected that year with the onset of El Nino conditions. El Nino is a climate phenomenon that drives warmer weather in South-east Asia.

But even without El Nino conditions, South-east Asia typically experiences dry weather between May and September.

The report noted that while there has been a spike in fires in Sumatra in mid-July, the remaining period of the dry season is expected to be milder and shorter than most dry seasons in the past.

It added that the peak of the dry season is expected to be in August.

“For now, the weather is relatively benign, and fires can be kept under control unless the situation changes,” the report said.

Indonesia’s economic policies could also be a driver of smoke haze in the region.

Former Indonesian president Joko Widodo had during his administration from 2014 to 2024 rolled out numerous policies to prevent forest fires, noted Prof Tay.

For example, following the 2015 haze incident, the Indonesian government said companies involved in burning would have their permits revoked, and prosecutions of corporations liable for fires increased significantly, said the report.

“This is no coincidence that we have seen less of this haze problem over this last decade,” said Prof Tay.

He said the current administration of President Prabowo Subianto has promised to continue the previous team’s forest management policies.

However, there are pressures from overall growth ambitions, Prof Tay said.

Indonesia faces a triple challenge in meeting food security, energy and export imperatives, said the report.

The growing conflict between using crops for food versus fuel is rising, especially as the country plans to expand its biodiesel and bioethanol mandates, it added. These mandates are government policies that require blending a certain percentage of biofuels into transportation fuels.

Indonesia is seeking to ramp up its biodiesel to contain a 40 per cent blend of palm oil-based fuel to cut its energy imports. This could lead to an increased demand for palm oil.

The report said the Prabowo administration has indicated that agricultural commodities production – and in particular palm oil – will remain a major part of the country’s economic strategy. Indonesia is the world’s largest palm oil producer.

The report also noted that Indonesia’s food and energy projects could result in more clearing of forests and peatlands, citing non-governmental organisations and environmental media organisations.

“Care is needed to ensure that efforts to create new plantations are sustainable, and to increase the efficiency of existing plantations,” it added.

Since 2019, there have been no severe transboundary haze events impacting Indonesia, Malaysia and Singapore, although milder episodes occurred in 2023 and more recently in July 2025, said the report.

Singapore last experienced severe haze in September 2019, with air quality reaching unhealthy levels on some days.