Market Update 7th March 2024

El Niño

In an update from the World Meteorological Organization (WMO) the current El Niño weather event, one of the strongest on record, is weakening; however, it continues to influence global weather patterns, into the middle of 2024.

The continuing, albeit weaker, El Niño and predicted above-normal sea-surface temperatures over much of the global oceans are expected to lead to above-normal temperatures over almost all land areas in the next three months and influence regional rainfall patterns.

Coconut growing in the Philippines has already been affected by the warmer temperatures and altered rainfall patterns typical of El Niño events. Flooding in recent months in some areas of the Philippines has caused damage to infrastructure, including bridges, and changes in crop yields.

Palm Oil

Malaysian palm oil futures jumped more than 1% to MYR 4,038 per tonne, building gains from the prior session amid strength in rival edible oil, firmer crude oil prices, and bets of robust demand in the near term.

Meanwhile, worries about weak production and shrinking stockpiles persisted, with a leading industry analyst saying in a conference that global palm oil output fell in Q1 of 2024 while stocks shrank 1.2 million metric tons so far in the quarter.

Separately, Reuters estimated that Malaysia’s palm oil stocks fell below 2 million tons for the first time in 6 months at the end of February, with output down for a fourth month.

Capping the bullish impulse were reports that palm oil imports in top buyer India sank 35.6% mom to a 9-month low in February, as purchases of sunflower oil grew.

In the meantime, trade figures in China will be due later this week, with caution growing that a week-long holiday during the Spring Festival may distort export and import data for January and February.

Summary 

With delays reported from some suppliers in Q1, there is a tightening of supply in the market; we recommend getting orders in as soon as possible.