What does 2016 hold?

Most popular question at the moment is whats going to happen in 2016? OK so what factors will affect the market next year.

Crude oil prices have fallen through the $40 a barrel level as supply glut continues. OPEC decided this month not reduce production as they hope continued low prices will drive some producers such as North Sea out of business. Most seem to believe that prices will remain low through out 2016. There is a price connection between edible oils and crude oil for the production of Bio fuels. But with El Nino during first half expected to reduce crops of Palm Oil and continued extreme weather events in US and South America expected to possibly impact Soya oil so will we see the de-coupling of Bio Fuels to Edible oils? If this does happen edible oil could rise in price more dramatically then been thought before? That El Nino event is likely to hamper crops of Palm Oil pushing prices possibly up further. This could spill over into coconut oil pushing up prices also. However low crude oil prices can slow economies world wide which could lower demand for edible oils so pinning back any prices increases.

Desiccated Coconut has seen a resurgence in consumer products in last couple of years as its super food status has been brought to light. But higher prices and more importantly higher profitability for suppliers has lead to increased production capacity. That competition could peg back any price increases from running away. But its still likely that crops will be lower this year due to El Nino so reducing supply just when demand is higher!

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