Happy 2017

Firstly we would like to wish everyone a happy and healthy 2017.

So over Christmas we saw typhoon ‘Nock-Ten’ hit the Philippines. This was the strongest typhoon to hit over the holiday period in fifty years. We now know that there has been damage to trees in the Luzon area which will likely result in short supply of coconut products at least till the middle of the year or later. It will take several weeks for the supply of raw nuts to dip but already prices are have started to strengthen. For Palm oil 2017 holds a difficult year. Will a push by organisations such as WWF see a shift away from the worlds most popular edible oil? Sustainability is rapidly growing as a key issue in this market. But demand for Palm oil is steadily increasing due to demand from emerging markets such as China. But they have a plan to plant there own Palm oil which could increase world supply. Also what about Biofuels? With OPEC reducing crude oil production will we see higher crude prices so pushing up demand for Biofuels of which Palm is the main one.

Desiccated prices held firm over the holidays although most suppliers were withdrawn because of the typhoon. It will take a few weeks for the damage to the trees to reflect in a dip in supply of raw nuts. Its likely as companies return to work so they will pick up any shorts for the first period. This period could sell out rather quickly as shippers reduce production expectations to reflect low raw nut supply. Whilst its likely the market will move slowly because of the time of the year upwards is looking the most likely direction.

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