El Niño-related weather patterns are expected to cause uneven agricultural supply disruptions. Highly concentrated commodities like cocoa and palm oil face the greatest price risks, while grain markets are bolstered by more diverse production bases.
Key Takeaways
- 1.El Niño creates uneven agricultural risks, with highly concentrated supplies like cocoa and palm oil more vulnerable than diversified grains.
- 2.Cocoa prices face significant upward pressure due to El Niño-linked dryness in West Africa and historically tight inventories.
- 3.Palm oil faces strong upside price risks as El Niño compounds structural supply constraints including ageing trees and new biodiesel mandates.
Table of Contents
- Grains
- Rice: sufficient inventories to cushion the impact
- Wheat: production to normalise from a record harvest
- Corn: tightening balance, though El Niño normally benefits
- Palm oil: El Niño adds to existing market pressures
- Cocoa: another supply shock is looming
- Coffee: tight coffee inventories remain a concern
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Authors
Soni KumariDaniel Hynes
Themes
Commodity Supply ConstraintsEl Niño Agricultural Impact
Regions
Asia PacificUnited StatesIndiaIndonesia