The NOAA has confirmed that the world is at the start of an El Niño, which means less rainfall in Southeast Asia and pressure on oil palm yields.
Early signs point to a severe event, which would cause a significant edible oil deficit in 2024. Ongoing drought in the U.S. is a budding wild card, affecting soybeans.
The report projects a 40% YoY higher average crude palm oil price in 2024. Given depressed consensus expectations and undemanding valuation, the risk-reward is bullish on a 6-12 month horizon.
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