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Could El Nino weather affect Golden Agri's overall supply?

PC Lee
PC Lee9/26/2018 03:11 PM GMT+08  • 2 min read
Could El Nino weather affect Golden Agri's overall supply?
SINGAPORE (Sept 26): There is a 50-55% chance of an El Nino onset of fall this year from Sept to Nov with the probability increasing to 65-70% during winter 2018-19, say weather forecasters.
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SINGAPORE (Sept 26): There is a 50-55% chance of an El Nino onset of fall this year from Sept to Nov with the probability increasing to 65-70% during winter 2018-19, say weather forecasters.

Should weather conditions turn severe, this could have a negative impact on total palm oil production subsequently and a decrease in overall supply would increase prices, if demand stays the same.

However, to date crude palm oil prices have failed to rally despite the impending El Nino weather conditions. According to a Wednesday report by OCBC Investment Research, the prognosis over palm oil demand to date remains soft; the recent contraction in palm oil demand in both EU and India are likely to persist for the rest of this year.

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