'Medium risk' of severe haze as higher agricultural prices drive deforestation: Singapore researchers
But the assessment by the Singapore Institute of International Affairs (SIIA), released on July 28, noted 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.
The SIIA 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, and 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 a low risk, and red denotes a high risk.
The report said that 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.
The release of 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 National Environment Agency (NEA)'s website, 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 hotspots 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.
Other than commodity prices, the SIIA also assesses haze risk based on weather and governmental 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 SIIA report noted that while there have been a spike in fires in Sumatra, Indonesia 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 'Jokowi' 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 that 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 Tay.
He said that the current administration under Indonesian President Prabowo Subianto has promised to continue the previous administration'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 for fuel is rising, especially as the country plans to expand its biodiesel and bioethanol mandates, it added.
Biodiesel and bioethanol mandates in Indonesia are government policies that require blending a certain percentage of biofuels into transportation fuels.
Currently, Indonesia has a mandatory 35 per cent blend of palm oil-based fuel in biodiesel and is seeking to ramp up to biodiesel containing 40 per cent palm oil to cut its energy imports. This could lead to an increased demand for palm oil.
The report added that the Prabowo administration has indicated that agricultural commodities production - and in particular palm oil - will remain a major part of Indonesia's economic strategy. Indonesia is the world's largest palm oil producer.
It also noted that Indonesia's food and energy projects could result in more clearing of forests and peatlands, citing NGOs 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 entering unhealthy levels on some days then. - The Straits Times/ANN
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